Rankings are a bamboo forest; Consulting is a vineyard

By George ILIEV
CorporateNature Metaphor Series, No 94

When you create a ranking for an industry, you are growing a bamboo forest: visible from afar but with shallow roots. Botanically the bamboo is a grass and its roots reach down only a metre under ground. Similarly, rankings do not change the ground underneath: they just increase the visibility of the status quo, like bamboos that create a leafy cover on top of a mountain slope.

On the other hand, when you offer a consultancy service to an industry, you are planting a vineyard, as vine roots reach up to 10 metres deep. What is key in consulting is that it produces recommendations for improvement - the essence of a long and structured process - just as the vines produce grapes based on the richness of the soil.

Bamboo (Source: Wikipedia)

Consultants are the perfect gardeners

By George ILIEV
CorporateNature Metaphor Series, No 82

Consultants are gardeners par excellence:

• Some projects they water;
• Others they build trellises for;
• Still others they space out when planting;
• The overgrown ones they prune and trim;
• And occasionally there are the ones they have to uproot.

Gardening (Source: Wikipedia)

When stars collide, teamwork suffers. Why teams with many stars often lose?

Stars in some sports compete among themselves, rather than against their opponents
By George ILIEV

Research published in Psychological Science finds a satiation threshold of stardom in various sports: having too many stars on a team often hampers the overall success of the team. In a sport like football (soccer), having more than 75% stars on the team turns out to be counter-productive. In basketball the threshold is even lower, at 60%.

When individual stardom turns into collective martyrdom

Having too many stars become a hindrance when the roles in a given sport are not highly specialised. Ten of the 11 players in a football (soccer) team run and kick the ball pretty much the same way. All five basketball players dribble and pass similarly.

On the other hand, in sports with highly specialised roles such as baseball (where one is using a bat and the other a glove), there is no harm in piling on more and more stars… until they fill up the night sky.


Game Theory explains internal competition within "zero-sum" games

When the roles in a team are not highly specific, as in basketball and football (soccer), play degenerates into an individualistic performance where each player views their activity within the team as a zero-sum game. This gives them an incentive to keep the ball longer, to the detriment of fellow team-mates who might be in a better position to score a goal. As a result, instead of competing against the “competition”, the team starts to compete within itself, leading to the poorer performance of "star-spangled teams".

On the other hand, in baseball the players have an incentive to cooperate all the time as each player’s success is a win-win for all team-mates (i.e. a non-zero sum game).

Competition trumps cooperation in the corporate tug-of-war

This sports analogy is directly observed in the business world. Consulting and investment banking teams composed of multiple star performers often fail when the team roles are homogeneous in design and start to overlap. This means a degree of hierarchy may actually make a team more productive: a team composed of a director, a manager, executives and coordinators divides the responsibilities and focus on different tasks, so the team members do not compete against each other. Otherwise, in a high-pressure environment, you end up hearing stories about one flight attendant hitting another with a tray in front of all passengers.

Two key take-aways:

1) To achieve team success, it is plainly not enough to have diversity of backgrounds; diversity of roles needs to complement team design.

2) When stars collide some teams lose out. And I am not talking astrology here. Rooney and Gerrard: take note!

Entrepreneurship, Consulting and the MBA: The Three Stem Cells of the Business World

Three ways to maintain versatility in the age of uncertainty

By George ILIEV

An undergraduate student at the business school I graduated from recently approached me for career advice. "Is there a way you can keep your options open throughout your career?", she asked. The article below summarizes my advice to her:

Many things in life are path-dependent:
- Your second job depends on your first job;
- your first job depends on your internship;
- your internship depends on your university degree;
- your university depends on your high school,
- and so on all the way to kindergarten and even before that, possibly to the kindergarten of your parents and grandparents.

There are opportunities to get out of the rut and change direction from one stage to the next but the probability of this happening naturally is very low. Even a smaller cross-industry lateral move (say from retail manager to supply chain manager) requires a lot of effort in rowing against the current... and a dose of luck.

The Three Stem Cells of the Business World

There are three tracks in business that are immune to path-dependency and can lead naturally to a variety of different industries and functions. I call these “the three stem cells of the business world”, as they contain a high degree of versatility and can be moulded into almost anything, just like the stem cells of an embryo multiply and grow into different tissues and organs:

1. Entrepreneurship is the most functionally-versatile profession as an entrepreneur (on the business side) will perform a variety of functions. These include marketing, business planning, business development, PR (blogging), finance (raising capital), accounting, legal and at least half-a-dozen other functions before the startup grows big enough for these roles to be filled by specialists.

2. Consulting, unlike entrepreneurship, is not functionally versatile but is instead extremely industry-versatile. Management and operations consultants often clock up projects in a dozen different industries, which is the essence of consulting and the main source of value creation: the cross-pollination effect.

3. The MBA gives a graduate both functional and industry versatility, as it combines condensed educational and professional experiences in a number of fields. However, the MBA is a “stem cell” with an expiry date: after your first post-MBA job, you can no longer rely on its versatility and will invariably start specialising in your new pathway (unless you go into post-MBA entrepreneurship or consulting).

These three stem cells of the business world are crucial in our age of uncertainty. The sheer number of unemployed finance professionals after the 2008 crisis shows how path-dependent business can be. And though the trio is not entirely ploripotent, (i.e. the three cannot lead to absolutely any outcome), they are the closest we get to a business world version of the stem cell.

Energy, mass and the speed of light

If you remain unconvinced by the biology metaphor above, here is a memorably superficial analogy from physics. Einstein's fundamental equation E=MC2 (energy equals mass times the speed of light squared) has the same three elements: E(ntrepreneurship), M(BA) and C(consulting). Now, who would argue with Einstein?

(Photo credit: Stem cell, Wikipedia)