Thursday, September 25, 2008

Corporate change #5 - role of consultants in "bringing the outside in"

In earlier segments of this thread, we discussed how "bringing the outside in" is imperative for companies to keep aware and humble enough to avoid complacency and drive their organizations forward successfully. By contrast, companies in which the context inside the company drowns out voices from the outside tend to attribute their successes to their internal competencies, blame their failures on outside entities, and stagnate their way to failure.

I was talking to an old customer earlier in the month about working to help companies learn about the world outside. "Exactly!" he said. "Companies need people like you to come in and help them learn about what customers think."

To a point, yes. Having an outside perspective that is less invested in the company's culture or politics is valuable. But not at the expense of a broad, internal effort to understand and make sense of the outside world.

Referring to the business complexity literature we've touched on a few times in this blog, the world outside is a complex, messy place. It's constantly changing. So old information, and limited sources, are not very useful. To gain the best, most supple understanding of the outside, a company needs lots of eyes and ears, a diverse group gathering and interpreting information, and creating stories about it. Consultants should be among that group, but not the only or the most credible source for outside information.

Management's job is to enable that story-creation, create systems for capturing and making sense of it, and above all to honor and use it to create strategy, spur innovation, and otherwise enable Kotter's "sense of urgency."

That's a job that even McKinsey might hesitate to take on.

Prior posts in this series:
Part 1 Part 2 Part 3 Part 4

Reading list:
Gary Hamel, "The Future of Management"
John Kotter, "A Sense of Urgency"
Charlene Li & Josh Bernoff, "Groundswell"
Dave Snowden & Mary Boone, "A Leader's Guide to Decisionmaking," Harvard Business Review, November 2007.

Related post:
Complex business problems need diagnosis

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Andrew Meyer said...


thanks for a great series. It's interesting to me because I'm philosophically and practically opposed to what you're describing.

The idea of companies reinventing themselves, innovating new markets and growing to even greater heights is popular and great for consultants (hopefully especially for you).

Unfortunately, it just doesn't reflect reality. In any 40 year period, almost the entire DOW is replaced. Large companies (AIG, GM etc.) survive because of socialistic intervention, not because of reinvention.

What would be far better and will happen eventually anyways, is capitalistic process of creative destruction.

The ideas for new businesses are visible from inside old businesses, but the structural overhead of the old business can't adapt to the business models of the new.

There are many companies, intelligent people and authors invested in trumpeting the approach you describe. I love your writing and what you present. If you're interested in seeing the opposite view, check out Joseph Shumpeter and the "Austrian School of Economics" ( It is the capitalistic opponent of the "Manchester School of Economics" and Keynes. They are the intellectual fountainhead of the ideas you're putting forward.

All my best,