The Centre for Management Consulting Excellence’s Research Awards & Urwick Cup Conference, Worshipful Company of Management Consultants
Alderman & Sheriff Professor Michael Mainelli FCCA FCSI(Hon) FBCS, Goodenough College, 12 November 2019
Dean, Master, Ladies & Gentlemen:
As a researcher, it is a distinct honour to be asked to make a few remarks about the utility of research to the profession of management consultancy. Good research stems from profound wonderment at our ignorance. As Einstein supposedly remarked, “If we knew what it was we were doing, it wouldn’t be called ‘research,’ would it?” Naturally, as a good researcher, it turns out that there is little evidence that Einstein ever said this, or even said this first, and a good deal of evidence that it ought to be attributed to several other people.
If there is a point to my remarks this afternoon it is to encourage you to revel in your ignorance, simultaneously your greatest weakness and your greatest strength. Good management consultancy starts with proper research.
My first of three research tales is about a North American technology firm, let’s call it Boysenberry. Twenty years ago Boysenberry wanted to come to Europe with their personal digital assistants (PDAs, remember?) and sought tenders from consultants to help them. Boysenberry would only do cold tenders. My firm, Z/Yen, was asked to tender to help them enter the European market. We lost. Boysenberry failed in Europe too, trying to sell what they sold in North America. They asked us to tender again. We lost a second time. Boysenberry failed in Europe a second time.
Firms should shop before buying. Shoppers want to learn. Buyers are know-it-alls. Women shop, men buy. At their third attempt Boysenberry decided to shop, they talked to us. We convinced them of their ignorance of the European market. The final research highlighted Europeans very accepting of the status of their IT professionals, accepting claims that PDAs needed a few years of strategic planning. North Americans wanted PDAs now, rolled up their sleeves to install servers, bypassing internal professionals who got in the way. The solution, not exactly a compliment to us Europeans, was to pair Boysenberry with major telecoms firms to provide a full service, otherwise Europeans wouldn’t buy. After three tries, admitting ignorance got Boysenberry going.
Management consulting research is essentially the scientific method applied to business problems. Moving ourselves and our clients down a road from some chaos to some more order. My personal motto is ‘Ordo ex χάος’, ‘Order from Chaos’.
Sometimes we consultants go too far. A surgeon, engineer, and management consultant were arguing about whose profession was oldest. The surgeon said, “in the Bible, God created Eve from a rib taken out of Adam. Surgery is oldest.” The engineer said, “even earlier in the book of Genesis, God created the order of the heavens and the earth from out of the chaos. Engineering is oldest.” The management consultant leant back in her chair, smiled, and then said confidently, “Ah, but whom do you think created the chaos?”
My background is science – aerospace and cartographic research, followed by Ministry of Defence research, and even today sitting on the accreditation body for UK certification agencies and laboratories. Z/Yen is a think-tank combining technology and finance research. Z/Yen researches many areas we know nothing about, ranging from quantum computing (our first work here was in the mid-1990s) to smart ledgers (our first blockchain was also in the mid-1990s) to low-loss high-voltage cables.
My second research tale is about some work with the City of London. Over some 12 centuries, The City of London has done a number of amazing things behind the scenes – bringing renminbi clearing to London, or taking the 1997 Kyoto Protocol seriously and starting the carbon emissions trading markets in 2005. At the turn of the millennium, people in London worried about business lost because the UK had stayed out of the Euro. The City commissioned research into the state of the market after the Euro, published in 2003 as “Sizing Up The City: London’s Ranking As A Financial Centre”. The study concluded London hadn’t gained, nor had it been harmed. It compared London with all its major competitors. New York, Paris, Frankfurt… Uhm. That was it.
I was stunned. The world I knew included Singapore, Chicago, and other overlooked centres. The City admitted its short-sightedness, but their budget was tight. So we co-created a new way of doing an index for 50 cities for the same price as studying four. Today, every six months you read news about the Global Financial Centres Index (GFCI), now on its 26th edition and analysing over 100 financial centres. GFCI research influences millions of jobs in finance, technology, property, and development. It began with the City admitting its ignorance, but also embracing the scientific method.
Science and the City are not strange bedfellows. In the 15th Century, London became a centre for the New Learning. The New Learning was heretical, subversive, and radical. It meant something big to Erasmus, two Bacons, a Colet, and a Moore. Today we call it Humanism. Metaphysically Humanism rejects belief without reason. Epistemologically it supports scientific scepticism, hypotheses, observation, and repeated experimentation. Humanism thrived in London for two reasons, the egalitarian and discursive culture of the City of London, and Continental war. Sir Thomas Gresham funded Gresham College for the New Learning in 1575. In 1660 the Royal Society began in Gresham College. Science was driven mostly by commerce, and a bit of war, until well after the first London universities in the 1820s. Do see a wonderful, new, permanent exhibition at the Science Museum on this, “London: Science City 1550 to 1800”.
Frederick Taylor was a great proponent of a management consulting scientific method well over a hundred years ago with his time & motion studies. Though you can take time & motion studies too far. For years one efficiency expert watched his wife’s routine making him breakfast. He analysed her trips between the fridge, stove, table and cabinets, often carrying a single item at a time. One day he told her, “You’re wasting too much time. Why don’t you try carrying several things at once?” As he explained to his fellow management consultants proudly, it was an enormous success. “It used to take her 20 minutes to make breakfast. Now I do it in ten.”
My third research tale is about Climate Change questions. In 2005, 100 researchers working for 24 firms joined the London Accord, sharing investment research to save the planet. We published a 780 page study on investability for climate change, concluding that numerous investment portfolios could successfully deliver the finance if the carbon price was kept above $25 to $40 per tonne. Along the way we asked an odd question – “What happens if we burn it all?” (i.e., burn all known reserves on balance sheets).
The comedian Jay Leno once quipped, “According to a new UN report, the global warming outlook is much worse than originally predicted. Which is pretty bad when they originally predicted it would destroy the planet.” Remember that we’re just over 400ppm now and 500ppm is bad, 550 is really bad, etc. The London Accord team concluded that burning traditional fossil fuel assets currently on balance sheets would result in 1200ppm. Something was wrong. The answers to burn-it-all led to the unburnable carbon initiative, the stranded assets discussion, and the Bank of England realising that such a large balance sheet adjustment constitute a major risk to financial stability.
In the City we talk about our convening power, we identify a problem, then covene people to make contributions, build consensus, gain commitment, communicate, and even celebrate success. That’s what the Centre for Management Consulting Excellence conference and awards do – convene us about research in the 20th year of the Urwick Cup.
But the very first stage is identifying the problem, and it always starts with a good question. French thinker, Claude Lévi-Strauss, once concluded that, « Le savant n’est pas l’homme qui fournit les vraies responses, c’est celui qui pose les vraies questions ». “The learned man is not the man who provides the correct responses, rather he is the man who poses the right questions.” This is an old point that cannot be made often enough – or can it?
So three tales of research roles – helping to launch a successful product, helping to measure financial centres, and helping us to challenge fossil fuel finances. As long as there are good questions, there is lots of research ahead. Social, technical, economic, and political questions abound. Geopolitics from Brexit to China, from Australia to Africa and America, all provide great subject areas. Sustainable Development Goals 1 to 17 provide an infinitude of excellent, do-good subject areas.
I’ll end by sharing a wry quote from Terry Pratchett’s book Interesting Times, “Chaos is found in greatest abundance wherever order is being sought. It always defeats order, because it is better organized.”
In conclusion, please do admit your ignorance. Please do promote the scientific method. Please do ask great questions. But most of all, have fun. Good research well done is enormous fun. You learn all the time, and once in a while have a chance to change the world. What can beat that?