Product Operating Model Marty Cagan

Transformation Anti-Patterns: Management Consultancies

There are several common anti-patterns when it comes to the reasons for failed transformation efforts.

But one of the most well-known, most common, and most frustrating has to do with the big management consultancies.

Especially since most people that have worked with these consultancies know that it’s not because their people are clueless.  In truth, most of the time the people there – at least the senior ones that you interact directly with – are well above average.

And if you’ve seen what these management consultancies are charging your company, you know it’s not due to lack of investment on your company’s part.

So if their people are smart, and your company is willing to spend what they’re asking, what’s the problem?

My theory is that this anti-pattern is structural.  These firms are inherently unable to help, and transformations driven by them are almost certainly destined to fail.

Think of it this way.

Suppose your local power utility company wanted to move from fossil fuel powered energy to renewable energy.

So your power company calls up their contacts in the fossil fuel industry and ask “can you help us?”

Why would they do this?  Because they’ve worked together for decades.  And because of course the fossil fuel company is smart enough to position themselves as in the “energy” business.

Do you expect the fossil fuel people to say no?  Of course they’ll say they can help.  

But really what you’re asking is for them to act against their own institutional interests.  And even if they were willing to do that, it’s unlikely they know how.

To bring this back to tech, in your existing stakeholder-driven, feature-team model of working, the stakeholders have long leaned on business consultants, but if transformation requires that this capability not only be brought in house, but also handled by different people (product leaders rather than the stakeholders), do you really expect this outside firm to be willing and able to push that change?

Stakeholders hire management consultants for help with decisions, and those consultants will not be incentivized to provide advice that diminishes the power of the people who hired them.

This is much the same problem as what happens with outsourcing in IT.  

If you’ve been outsourcing a significant percentage of your engineering to one of the outsourcing firms, but transforming requires bringing this competency in-house, do you really expect the outsourcing firm to advocate for that?  This is a direct threat to their business.

Transforming to the product model involves changes well beyond how your stakeholders make decisions, and how you staff your product teams.  Understanding this is on you.  

You can’t expect your current management consulting providers or IT outsourcing firms to help eliminate your need for them.

That said, there are often very good people in the management consultancies and the outsourcing firms, and just because you shouldn’t hire their firms to help you transform, that doesn’t mean you can’t hire away some of their people.

Just be sure you have someone with the necessary experience in the product model so that their minds and skills will be put to good use.