Management consultants are, on the whole, reverent towards their clients. I have never met any who acted anything like Marty Kihn from House of Lies. If anything, consultants tend to be a bit too austere and serious, and develop a deep awe for their patron-benefactors. Over time they often begin looking, acting, and dressing like them. They reach epic heights of sympathetic identification, and in the most extreme cases, develop a type of client Stockholm Syndrome that we in our own industry call “going native.”
There is, however, one client belief that will make consultants laugh one hundred times out of one hundred, even if silently. This is every client’s conviction that “our industry is unique.” This comment is usually offered by a 25-year veteran of the client’s industry who has never worked anywhere else. While consultants will go to great lengths to find ways to agree with their clients, this is one issue in which they can rarely manage anything better than stifled non-assent. Consultants spend their own careers mostly moving across industries, where they see patterns, repetition, and predictable dynamics — hearing the whole way, of course, about how unique these dynamics are.
Industry uniqueness bias is a genuinely bad and damaging thing. First, it shuts a company off from significant sources of talent and knowledge, most notably all the valuable people with relevant skills who happened to develop elsewhere. Second, it shuts off the process of learning. The people who grew up in an industry share the same formation, perspectives, and cognitive biases. Over time they mirror each other to an extreme degree. Organizations composed exclusively of them tend to stagnate, as their wellsprings of curiosity and innovation dry up.
The ability to flourish in a job requires traits like intelligence, charisma, persistence, steadiness, functional knowledge, and industry knowledge. Put otherwise, industry knowledge is one of myriad factors in professional job success. When companies focus on industry experience and make it the sine qua non of hiring decisions, they potentially under-optimize for all other relevant qualities in their team members. The same goes for receptiveness to outside ideas. When companies believe they can only learn from watching their peers, they and those peers begin resembling each other to an astonishing degree, and find themselves locked in an undifferentiated race to the bottom in margin and profit.
In an era of innovation and disruption, it is a grave mistake not to regularly draw talent and ideas from other industries. Industry boundaries are being drawn and redrawn almost daily today. Business models and technologies are being imported from one industry to another with startling frequency. BMW’s iDrive technology, for example, came from the gaming industry. Throughout the 90s Commerce Bancorp won depositors by running its branches like retail stores. The TRIZ method, a systematic method for innovation derived by studying patents, catalogs countless examples of cross-industry borrowing and breakthroughs.
Steady-state operation is of course an important part of any business, and it is absolutely acceptable to learn from one’s peers. The important thing is to do this learning consciously and not let it degenerate into mindless imitation. Too often, it does. Regularly importing talent and knowledge from outside your industry is the best inoculation.
Rob Lawrence 