• Don’t take management consultants too seriously

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    REY ELBO

    REY ELBO

    BEST-SELLING writer and entrepreneur Rolf Dobelli, in his 2013 book, “The Art of Thinking Clearly,” talks about “chauffeur knowledge” as one reason why you should not take all news anchors seriously. He is referring to news readers, who earn a lot of money and gain a lot of respect simply by reading from a script.

    Dobelli’s advice is more than applicable to management consultants, many of whom have not even occupied a managerial post in their career and yet manage to get some clients by fooling a lot of people. Such clients are mostly those who have very low training budgets or none at all and just want the management consultant’s service for free.

    The author-entrepreneur explains the phenomenon of “chauffeur knowledge” with a true story: “After receiving the Nobel Prize in Physics in 1918, Max Planck went on tour across Germany. Wherever he was invited, he delivered the same lecture message on new quantum mechanics. Over time, his chauffeur came to know it by heart:

    “It must be boring for you to be giving the same speech each time, Professor Planck. How about I do it for you in Munich? You can sit in the front row and wear my chauffeur’s cap. That’d give us both a bit of variety.’

    “Planck liked the idea, so that evening the driver held a long lecture on quantum mechanics in front of a distinguished audience. Later, a physics professor stood up with a question. The driver recoiled. ‘Never would I have thought that someone from such an advanced city as Munich would ask such a simple question!

    “My driver will answer it.”

    Dobelli admits borrowing such story from Charlie Munger – “one of the world’s best investors.” And now I’m here borrowing from the two distinguished gentlemen to explain that the “chauffeur knowledge” theory can be as harmful to willing victims who are looking for the services of management consultants.

    Dobelli and Munger tell us of two types of knowledge: “First, we have real knowledge. We see it in people who have committed a large amount of time and effort to understanding a topic. The second type is chauffeur knowledge—knowledge from people who have learned to put on a show. Maybe they have a great voice or good hair, but the knowledge they espouse is not their own. They reel of eloquent words as if reading from a script.”

    That’s the trouble. In our jurisdiction, many people are enamoured by management consultants with good looks and at times with good, soothing voice. Never mind their lack of corporate experience and mastery of the subject matter. Just like Dobelli in the case of news anchors, I’m amazed at how people are hooked with young, inexperienced guys with only an MBA to show in their bio-sketch.

    Dobelli says “it is increasingly difficult to separate true knowledge from chauffeur knowledge,” unless you’re a news anchor or an actor/actress who can fake it all the way to national politics. We know that news anchors know next to nothing about the report someone else has prepared and written, and yet they can act like they are very knowledgeable about the subject of the report. They smile at a bit of good news, and put on a sad face when reporting about a tragedy.

    To avoid being victimized by management consultants with chauffeur knowledge, one has to understand the “circle of competence” – a term coined by Warren Buffet, an American business magnate and the second richest man in the US, with a total net worth of $78.7 billion as of March 2017.

    Dobelli explains that what lies inside the “circle of competence” is what a person knows and understands intuitively like the back of his hand. Or if one has a perfect set of eyes, he can make things happen without reading from a prepared script.

    Therefore, what’s outside of the “circle” is anything that one can partially comprehend. And to test if your management consultant is either inside or outside of the “circle,” you have to conduct an interview with him. Ask a prospective consultant to come to explain to you what’s on his mind without using a Power Point presentation.

    Allow the management team to conduct a wolf-pack interview. As soon as you announce your third killer question, you’ll know right away if the consultant before you has the perfect grasp and the right work experience of the subject matter.

    And of course, the best gauge is to check how the consultant before you has done with his last three clients, who have paid good money for hiring his services. Surely, they will give you the best possible and objective comment you can’t find elsewhere.

    If they’re not happy, they will tell you the reasons why paying peanuts is only for monkeys. So, how many consultants do you need to change a light bulb? Answer: It depends on your budget.

    Rey Elbo is a business consultant specializing in human resources and total quality management as a fused interest. Send feedback to elbonomics@gmail.com or follow him on Facebook, LinkedIn, or Twitter for his random thoughts on Elbonomics.

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