by Martin Kihn
And CGEY has summed it up best in a recent corporate statement: “Under pinning [sic] our values is a common aspiration on [sic] all of us—‘We say what we do and we do what we say.’ ”44
One agrees.
McKinsey & Co.: McKinsey weighs in with two missions (“Help clients make lasting improvements” and “Attract and develop exceptional people”) and four so-called aspirations (“Service clients,” “Deliver the best,” “Environment for superior talent,” and “Values-driven governance”). Moreover, not to disappoint seekers such as yourself, they close out this impressive run with four actual, official “core values.”
McKinsey’s four core values, paraphrased:
Impact
Being the Best
Meritocracy
Self-governance
While your firm had ten values and can’t spell any of them, McKinsey has just four and lives at least a few. It occurs to you that maybe there is a key lesson in here—that having fewer values is better than having more values, because people have bad memories.
As it happens, you’re pondering this shortly after Fortune magazine issues its annual list of the Most Admired Companies in America.45 Because it is what consultants do, you decide to perform a quick analysis. You take a sample of companies from the top and the bottom of the list—the most-admired and the least-admired, as it were—and compare their core values, looking for patterns. Among the most-admired, you pick the top five: Wal-Mart, Southwest Airlines, Berkshire Hathaway, Dell, and General Electric. Among the least-admired, you go for Tyco, Waste Management, and—everybody’s favorite disaster story of the new millennium—Enron. You throw in a few wild cards such as Comedy Central, which sometimes makes you laugh; the U.S. Navy, inventor of core values; the CIA, inventor of fear; Wrigley, because you like gum; the Dollywood theme park; the Catholic Church; and the Buddha.
It turns out they’re all the same. That is, the twenty-five entities in your sample cite fifty-two different core values. Of these, twenty-two (42 percent) are mentioned only once. Fully 65 percent are mentioned only once or twice; these cats and dogs include such values as modesty, honor, freedom, family, and heartfelt emotions. On the other hand, ten values are mentioned by five or more of the survey sample and an additional three are cited by four or more. These are the top ten core values of the survey population, in order from least- to most-mentioned:
10. Fun
9. Honesty
8. Trust
7. Diversity
6. Responsibility
5. Teamwork
4. Excellence
3. Respect
2. Integrity
And the number one core value of your survey sample is…
1. Client Service
You are about to give up on this core values idea completely when you run across a little company that reaffirms your faith in the basics. We should not allow the Enrons of the world to corrupt our belief in the Judeo-Christian ideal of first principles. Maybe the pope was right. Maybe a company’s soul can be scrawled onto parchment and embodied wholly within word and deed. The company in question is Dollywood, a theme park in Tennessee founded by country superstar Dolly Parton. With a tip of the briar to Lacan and Derrida, the wits at Dollywood decided that their core value was simply this: value. So obvious it’s brilliant. Moreover, they take the next step right away and turn this value value into a series of actions. No vague chitchat. No running around stewarding the environment. No, at Dollywood they deliver value through their key principles. These include “special kid’s [sic] meals at 10 different restaurants” and “reduced admissions for seniors and children.”
With value like that, who needs values?
Dollywood aside, you begin to suspect that, like the war on terror, this core values idea is a lie developed to serve the master race. That is, until you happen to run across a copy of the Pfizer Annual Report 2001. Pfizer is one of the most successful companies on the planet, making over $10 billion every year in profits selling drugs like Viagra and Zoloft. It also turns out to be one of the most honest. In bold yellow text on a deep blue background on the cover of its annual report sits this sentence:
“Our mission is to become the world’s most valued company.”
That’s a step in the right direction you think.
It reminds you of a corporate finance class in business school where the professor posed a profound question on the last day before spring break. “What,” he asked, “is the ultimate goal of all corporate finance?” Kids shouted out nonsense like “To keep companies in business”… “To make the markets more efficient”… “To fund important projects”…
“No,” he said, “it’s more practical than that. It’s to maximize shareholder value.”
You didn’t know it at the time, but that phrase—“maximize shareholder value”—is a business cliché, a commercial mantra as overworked as “core value” and perhaps even more so. But it occurs to you both phrases have the word value in them… and that leads you to think maybe you have been approaching this question from the wrong angle. You have assumed the values in core values are something eternal and vaguely spiritual, like religious or ethical laws or the works of Tony Robbins. Perhaps they aren’t. Value has another meaning, after all—the one called forth by Pfizer and your professor:
Value = Money
That’s an honest-to-God core value.
You shoehorn the Good Partner in here—in a not entirely convincing way—because you have taken some of your feedback to heart. Talky Girl’s words—“It’s very difficult to tell if you’re serious or not”—didn’t bother you; you have heard that before. Sometimes, when you look back, it seems you have heard nothing but that before. No—it is something the Mormon says, on your last day at camp. On that day, after you have circled the room giving your feedback to the other members of the team, he pauses a moment and then says:
“Okay—now, I think it’s only fair right now. To ask. Do any of you have any feedback for me?”
There is a rather long silence, as everyone waits for someone else to say something.
You hear “Not really… no… uh-uh” from the others—and think: Cowards! And then a subtle shift in focus… away from the Mormon… around the room and up and toward the door—please let us leave—and then settling upon… you. Why you? This was inevitable: You are the one with the feedback development need. You are the one who supposedly has a problem with feedback, and here it is—a perfect opportunity, just handed to you, to do some work on your development need. That’s what they’re all thinking.
As it happens, you don’t like the Mormon. It’s much easier giving feedback to a person you don’t like.
“All right,” you say, “I have something.”
“Yes?” he asks, gently.
“I think sometimes you—you try to use humor as a way to get people to like you, or something. Not to get people to like you—more like, to, to avoid an unpleasant moment, or something that might be uncomfortable.”
“Yes?”
“Like yesterday, in the big plenary in the room. You were setting up that slide show about how we all want to be chiefs but we have to be Indians—”
“Yes?”
“That slide show—you started off with a joke, and, and, and… I just think sometimes it’s okay if you’re—if you want to be, I mean, it’s okay to be—it’s just that, that… it doesn’t have to be, you don’t have to. Setting things up, okay, I see maybe—what I mean is, you don’t have to.”
“Say again?”
“All I mean is, it’s okay to be serious sometimes. Totally serious.”
He pauses to think, perhaps, or to make you suffer in the toxic afterglow of some seriously inarticulate feedback.
“Thank you for that,” he says, leaning forward. “I have a question, though.”
“Yes?”
“Whether or not my jokes are funny—well, that’s not really important, at the end of the day. Right? What’s important is, it seems to me, whe
ther I’m communicating what I need to say. Right?”
“Uh-huh.”
“Now you have this really dry sense of humor, almost British in a way. It’s so dry it’s really difficult to tell when you’re joking and when you’re not. I feel like that’s almost worse than if you were making bad jokes, or whatever. Do you get my point?”
“Well…”
“That’s right,” pipes up Talky Girl, of course. “My feedback would be your style is more confusing than his. Anyway, that joke was funny yesterday.”
“Thank you,” says the Mormon.
“Yeah,” says Military Guy, who had been slowly peeling the label off a bottle of something. “Especially in, like, a professional environment. You have got to know where you stand.”
“I agree,” someone chimes in—and you wonder how this turned into a feedback session about you.
“Do you agree with that?” the Mormon asks you.
“Sure.”
“Good luck,” he says.
Now—what sticks with you from this exchange is not the feedback you got from the group. You happen to think British people are funny. What sticks with you is the Mormon’s rather defensive inability to accept your feedback graciously—his low-key lashing out. Good luck! This, you decide, is very bad listening. It’s not analytical, or empathic—it’s pathetic.
Feedback Camp was on the right track, after all.
The Good Partner is good because he knows exactly how to listen.
Basic Math for Regular Einsteins
Something else the Good Partner does very well is rough, rough math problems superfast!
“How much for tires?”
“Um… um…”—you fumble through your pages and pages of printed out Excel spreadsheets. “Five cents.”
“Mileage per year?”
“Um… um… two hundred fifty or three hundred.”
“Let’s say two-fifty. Coast to coast?”
“Pretty much.”
“Yes or no?”—this is the Danish Partner. His child is not well, pretty seriously not well, in fact. The stress has turned him into a first-class jerk, which nobody holds against him.
“Um… yes.”
“And full truckloads?”
“Yes.”
“What’s the price of diesel?”—this is the Good Partner, asking you an obvious and easy question to which, unfortunately, you do not have an answer.
“Right now?”
“Yes, right now.”
You make something up. “One-sixty.”
“One-sixty?”
“Um… yes…?”
“All right.”
And they’re off—three highly paid quite senior members of your firm’s partnership, crammed into a conference room sixty stories above the city of Cleveland, scratching furiously on light-blue lined graph paper with the fountain pens, a manic look in their eyes—adding, dividing—and, at the edge of their peripheral vision but never wholly out of sight, the other partners… scratching more furiously… getting closer, closer, closer to the—
“I’ve got it,” announces the Quiet Partner, who wears thick glasses and always gets it first. “Thirty-two point five cents a mile.”
“Point seven five,” jabs the Danish Partner.
“Not quite. You overcounted downtime.”
“Downtime is an opportunity cost.”
“Not if you have to incur it anyway, right?”
“What do you mean?” asks the Good Partner.
“In the truck lanes, the quick oil changes and tune-ups, right? Routine maintenance is part of running a truck. So downtime—”
“Has to be net of the routine stuff.” The Good Partner nods.
More scratching on the graph paper, then the Danish Partner looks up, scowling. “He’s right.”
“Of course he’s right,” says the Good Partner, smiling. “He’s always right.”
Round 1 to the Quiet Partner.
It is perhaps true that the single distinguishing characteristic shared by all those who make their lives long-term in consulting—as opposed to those, like yourself, who are just passing through on their way to something worse—is their ability to perform very simple calculations very fast. Many times you have sat in meetings with, say, three partners, pencils poised, waiting for a simple calculation to perform at blistering speed.
You have attended many, many brutal rounds—competitive speed math is the only sport enjoyed by your leadership cadre. It combines all those attributes consultants like to think they possess: all-around intelligence, numerical ability, problem-solving, and a lust for estimation. In fact, as the consultant’s rank improves, so does her distance from actual numbers. While associates are not allowed to estimate anything, the higher-ups are impatient with precision. Perhaps they have learned something.
Perhaps they have learned that consulting math isn’t really math at all.
As business prose is prose for drool-bucket doofoids, so everyday business math is math for blistering bozos. It’s math that is an insult to math. Basic to the point of banality: addition (90 percent), subtraction (very rarely), multiplication (in Excel), and division (whole numbers only). It is true that math as complex as any yet invented, and some yet more complex, is practiced by people in business; people on Wall Street with fast machines generating chaos and complexity guiding men with money to burn. Those people are not consultants.
What follows is a brief guide to the quantitative skills required of a top-tier consultant. The guide is brief because—well, because not so very many quantitative skills are required.
Orders of Magnitude—How to compare things that are not really alike
Top-tier consulting requires an easy facility with numbers from all walks of life. Numbers—particularly large, round numbers—are the top-tier consultant’s table water. An essential component of any tool kit is an ability to understand orders of magnitude, or how things that aren’t really alike can be made to seem more alike.
For instance: The population of the United States is about three hundred million. In recent years, Wal-Mart has enjoyed annual sales (mainly in the U.S.) of about $200 billion, making it the largest company by revenues that has ever terrorized the geosphere. It follows that Wal-Mart annually sells over $650 worth of stuff to every man, woman, and child in the country. That’s a lot of stuff. And it has been estimated that every American generates about one ton of garbage per year, or three hundred million tons of garbage—about ninety-five thousand tons for every Wal-Mart/Sam’s Club location. Coincidence?
Addition & Multiplication—How to bill a client (early and often)
Billing of the consultant’s time happens like this: Each rank of consultant, from first-year associate (called an “A1”) through senior associate (“SA”), principal (“P”), and partners (called “Officers”), has a published hourly rate. A fully billable week is assumed to contain forty working hours. The consultant’s hourly rate is simply multiplied by forty to get that consultant’s cost for the week. The forty-hour assumption holds no matter how many hours the consultant actually works; whether it’s one hundred or twenty, the client is billed for forty hours. Consultants are therefore spared the indignity of lawyers, who must account for their time to the minute and are assessed on their ability to avoid going home.
What’s surprising to many new consultants—and clients—is just how astronomically high the hourly billing rates are. For instance, a summer associate—a twenty-six-year-old with a couple of marketing classes under her belt—bills out at $100 per hour. Top-flight emergency room physicians bill about $140 per hour. A new associate—now twenty-seven years old with a couple more marketing courses under her belt—charges $225 per hour.
And it only gets worse:
Rank Hourly Rate
Associate 1 $225
Sr. Associate 1 $415
Principal 1 $495
Entry Partner $700
Sr. Partner $865
By comparison, a world-famous attorney—a person such
as David Boies, defender of Al Gore in Florida, or Johnny Cochran, defender of O.J. Simpson—has a billing rate somewhere around $500 per hour. So it follows that even a superstar attorney brings less value to a client’s table than a first-year principal at some random consulting firm.
There is an important distinction at work here, of course. You can be sure David Boies and Johnny Cochran actually get their hourly rate—that is, they personally receive the money and could take it to Tahiti if they chose. On the other hand, you the associate manifestly do not get your $225 per hour.
How much do you get? The working ratio is about four to one—that is, you the worker receive in your hand about $55 per hour. Where does the other $170 go? Use your imagination.
This equation can be represented visually as follows:
Subtraction—What happens to all that money
You were moving your brother’s apartment for the fifth time in four years recently, and he asked you your salary. The mistake you made was that you told him. It felt wrong doing it; it felt wronger after. He was at the time an English teacher at a particularly hairy public school in Bushwick and was battling clinical depression.
“One hundred and fourteen thousand,” you said.
“Oh my God.” He whistled. “You’re set for life.”
If only—
Net net, within a few months you are dismayed to learn your brother is boning up for the GMAT. He wants to go to Columbia Business School. This is an illustration of what a business philosopher might call the Fallacy of the Gross.46
As a second-year associate at a top-tier firm, you are paid a base salary of $117,000. This amount is payable monthly for the previous month, meaning you gross exactly $9,750 on the last day of each month. This is a highly respectable amount, considering the job on the TV show you left to go to business school paid you exactly $6,000 per month, for each month you worked. B-school seems to have handed you a 63 percent raise!