Don't blame the MBAs
Time will teach them that not everything is visible on their spreadsheets
“Your department isn’t important enough to be considered in our strategic review.”
The two junior consultants from the global consultancy both had impressive MBAs from prestigious schools.
But I had to ask…
“So, life and death aren’t important to you?”
Behind their wide-open eyes, the wheels were spinning, as they tried to decide how to respond.
The security guy was such an out-of-touch dinosaur!
He didn’t understand that a strategic corporate review couldn’t consider a department with a budget so small it wasn’t worth looking at.
The security guy asked another question.
“May I assume that your company’s goal with the strategic review is to find efficiencies that lead to greater cost savings than the size of the bill you send us will be?”
Their eyes opened even wider as their brains frantically looked for a way to tell me that I lacked a basic understanding of business.
The security guy, who was me, broke the awkward silence.
“My department’s role is to support our hotels to operate safely and securely. Best case it’s good for business. Worst case it’s about life and death. Is that not important for you?”, I asked.
“That’s not what we meant.”, they answered in unison. “That’s not what the strategic review is about.”
An interesting discussion followed. We developed mutual respect and connected with each other on LinkedIn.
They admitted that their job wasn’t really to conduct a “strategic review”, that was just the palatable name it was given so as not to scare the people they were interviewing.
Their job was to “find efficiencies”. Those efficiencies would likely lead to fewer staff. And yes, they were certain that the efficiencies they would find would be greater than the substantial bill their company would send to ours.
During our discussion, I asked if they had considered the ubiquitous value a department like mine represented during a time when travel risk was a growing focus for many corporations as duty of care laws came into effect around the world.
They hadn’t.
I asked if it might be a good idea to include looking for hidden values as part of a “strategic review”.
They agreed.
“But we don’t have any say in that. We’re just here to do our jobs.”
They were both in their mid-20s. Neither had operational experience working in hotels, but there they were.
Looking for ways our company could be more efficient.
The above scenario played out more than once during my career.
One year, it was my turn to be “reviewed”.
The Board asked for a strategic review of our corporate security programme.
The CFO wanted to go with a global consultancy we often used.
We were a big company and always put contracts out to tender.
Their proposal wasn’t aligned with the scope we had defined in the tender. None of the consultants had hotel management experience. If you looked for a stereotypical security professional, every consultant ticked all the boxes. Decorated military and law enforcement careers, supplemented by MBAs.
Oh yeah, the only person in the 40-something-page proposal that didn’t tick the security professional boxes would be billed for several days of work but had no tasks.
“That’s the person in our company that knows your company best. The other consultants will use them as a resource if they have questions…”
In other words, we would be paying a very expensive consultant to sit by the phone in case one of the other very expensive consultants had questions about our company, and, in the end, we would be paying an astronomical amount of money for something that wasn’t even close to what we asked for.
It took some convincing, but finally, the CFO, who controlled the purse strings, decided that paying five times more to a consultancy whose proposal was far beyond the scope we had tendered for, couldn’t be justified.
The boutique consultancy we chose, delivered a concise and timely report with clear and actionable recommendations, fully aligned with the scope we had put when we tendered for offers.
Upon reviewing the report, the Board went a step further and decided to apply the safety and security formula we had developed to all the brands they owned.
We took it a step further, too.
Remember that the newly educated MBAs agreed that looking for hidden values would have been a good addition to their strategic review?
We went looking for those hidden values on our own, and we found them.
After noticing many companies were transferring oversight of travel and travel risk management to corporate security, we built positive, collaborative relationships with our corporate security counterparts in those companies.
After a single year, those companies were increasing the business they were sending to our hotels at a rate three times faster than the average for our top 100 corporate clients.
A conservative estimate of the incremental top-line revenue generated by realizing this ubiquitous value showed that it would cover our corporate security budget for more than fifty years…
Bringing in a big consultancy to improve your bottom line can be expensive.
It’s even more expensive when it misses top-line opportunities because it relies on business school graduates that don’t understand your business, your operations, and how both are impacted by changes in the wider world.
Stay safe, Always Care
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This was great and very well written pool. I would have hated to be one of the junior consultants facing you in the meeting room!