Saturday, November 01, 2014

25 Stories About Work - Consulting HR and the Tragedy of the Commons

I was recently on a plane doodling and thought of some funny / interesting stories from 25+ years of working and traveling. So I decided to write them up as short, random chapters of a non-book with the title of this post. Hope you enjoy them and / or find them interesting. Certainly the value will be at least equal to the marginal cost of the book (zero)...

Baltimore, the late 1990's

In the late 1990's I worked for a large, now defunct, management consulting firm. This firm had recently gone public to great fanfare and morale was high. As a senior manager (a title right below partner), however, I had already seen a lot of boom and busts in this arena and was skeptical.

Consulting firms have large pools of skilled resources. You can classify the resources many ways - by skill set (MBA's, engineers, programmers, project managers), by industry expertise (finance, government, utilities, technology), by region (a large firm might have 30-50 offices scattered throughout the US and nearby countries), or by level (staff, senior, manager, senior manager, and partner). Each of these categorizations is valid in some dimension.

Consulting firms and audit firms used to have everyone come "up through the ranks". They rarely hired from competitors, and when you left you weren't welcome back. This has changed 100% today with staff at all levels jumping ship to competing firms, out to industry, and back in. The firms today also have an active alumni outreach plan to bring back talented staff that may want to return to consulting.

At the time the firm I was with was organized mainly by "industry" regardless of your physical location. I was in the utilities group along with many other individuals scattered throughout the USA. This firm did not have a thriving utilities practice so we were often fighting uphill for assignments and our staff were often "seconded" to other verticals to fill needs on sold work.

Our utility engagement was in Baltimore. Baltimore at the time was at a low ebb, with the downtown populated by crackheads and other undesirables. It didn't matter much to us since we were staying in a hotel a couple blocks from our client.

The partner on our engagement (who was the boss) was an ex-navy seal. He was a very fun and interesting guy. I wasn't there but one time another staff person said that they went to an antique store and the partner took a knife from the display and started doing that thing where you put the knife blade between each of your fingers in a pattern, going faster and faster. At some point the partner nicked the web of his hand and started bleeding but didn't even flinch. It sounded plausible to me.

For a variety of reasons the HR department of the consulting firm was investigating this partner. Since work is done on the road there is little supervision but somehow bad news about this partner got to HQ so they sent out a hapless HR partner. The HR partner sat down with me and started asking questions. My response was
I don't have anything bad to say about a guy who could kill me with his pinky
The interview obviously ended soon after.

Another time we had a terrible staff person on the job. She was useless. We sent her back to headquarters but my manager made a big mistake. He actually wrote her a review saying that she was terrible.

I immediately put my head in my hands. "How could you be so stupid?" I demanded. He seemed surprised. I told him that our goal in running an engagement was to get the best people we could obtain, by any means necessary. If someone was bad, we never said that they were bad, we just said that their set of skills weren't needed on the job here at this particular client. This was a more polite and vague way to get someone away from your client.

The next step was a surprise to him but not to me. Human resources called us up and was surprised. Why did you give her a bad rating? She had good ratings in the past?

The real issue was far different. Since you are just pulling staff from a massive pool, often from a different city and a different industry vertical, you had no interest or stake in the "bad" ones. You just got them off your client in some nice way and called it a day. There were thousands more to replace that person later. It was like trying to fish in the ocean. On the other hand, if you somehow found a good staff person, you went to great lengths to keep them indefinitely and to hide their capabilities from others who might snag them back.

So even though this staff person was terrible, it was a lot easier just to get them off your job then to tell the truth (they stink, should not be consultants) and start the firing and notification process, which is a big pain in the rear and a time sink. The flip side of this is the "tragedy of the commons" where it is in no one particular consulting managers' interest to weed out the bad staff, but it is in everyones' interest that expensive, lousy staff get fired. It was just best if someone else did the dirty work; I for one was too busy (trying to build an energy practice so my staff wouldn't be seconded away) to engage in such quixotic activities.

Thus now I was dealing with some clueless person from HR (who wasn't a consultant, didn't travel, and had no idea what was really going on) and I had to defend this negative review. She started pulling up all her positive reviews which were likely from short stints at clients where the team ended her part of the job quickly just to get her off the premises. Since I am stubborn I doggedly stood behind my managers' negative review (while cursing him in my head for making me do this) and at some point basically just told the HR person that everyone gives positive reviews of crappy staff because it is easier than working them out. She was stunned by this seemingly obvious revelation and at some point we ended the conversation on a low note.

But at least my manager learned the most important lesson; find any excuse to get rid of terrible staff by sending them off your job, and don't give out negative reviews of random staff just passing through.

In the end that firm "solved" this problem by just picking various days at random and anyone "on the beach" and not assigned to a client was fired. Since lousy staff were often on the beach this worked to some degree but also penalized good staff that just happened to be between assignments. We had an inkling that this was coming and worked to find (temporary) homes for some promising staff until after the axe fell. We missed a bunch though and they got fired.

In the end that firm went bankrupt (big surprise). It had some upside (was very entrepreneurial) but wasn't big enough or successful enough to float a high cost network of offices and partners with big salaries.

Cross posted at Chicago Boyz


Dan from Madison said...

When you write "on the beach" do you mean "on the bench"?

Dan from Madison said...

Also, hilarious story.

Carl from Chicago said...

For some unknown reason we used "beach" and "bench" interchangably. Bench would absolutely be better.

Yes those were some F'd up firms that's for sure.