HK Taxi Drivers

Two days ago on a ride from the airport into Central Hong Kong, I had another gangster taxi driver.  

I use the word gangster in a colloquial sense, implying someone who is ruthless and capable at the same time.  It reminded me of a ride I had two years ago to the airport, when I got into the cab with a man dressed in a white polo with a popped collar, aviator sunglasses, and perfectly coiffed hair.  After asking me when my flight was, he peeled off and practically drifted around corners as we flew down the hill.  It took me 3 minutes exactly to get to the Hong Kong Express, even though we passed major thoroughfares like Queen’s Road with Shibuya-like, human-tsunami intersections.  

My taxi driver this time was a guy who had on driving gloves and compression shorts, presumably to help the calf strain in pressing the pedals.  He also even had modifications to his car like wide angle rearview mirrors to help in his performance.  

The point of this post – long live people who are serious about their jobs.  

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Money Thoughts

What do I think about it?  Some related and non-related thoughts that have been brewing in my mind the past few months:

  • Occasionally over the past two years, when I have too long of stretches of working from home, I’m clawed with anxiety.  Not because I’m not getting paid, but because I don’t feel connected.  When everything is communicated over email and Dropbox, it’s too easy to feel like you have no impact on the world.  Client receives report.  Emails questions.  Wires money.  The end.

    I visited a few clients last year, three real estate moguls in their 60s and 70s.  One owned a portfolio of buildings in West LA.  Another was a developer in the Valley.  Another owned a chain of movie theaters.  All of them had enough money to retire and more.  All of them showed up to work at 7 am, and two of them worked out of small drab manager’s offices carved out of leftover space in the buildings they had developed/owned.  I’m talking about a desk topped with overflowing papers in a 300 square foot room.But I think I recognized something in that.  They feared being irrelevant.  I do too.  And that may drive me more than the prospect of retirement.

  • My most spendthriftiest years were when I was drawing a steady paycheck.  Since I knew exactly how much I was going to make, I would justify all impulse purchases by doing a quick ratio of [spending]/[next bi-weekly paycheck].  If it was less than 1, I would feel fine.  If it was over 1, then I would substitute [next bi-weekly paycheck] with [next month’s total paycheck].  I think this is because there was a disconnect between my efforts and pay.  Maybe over the average of a year, it would probably be equal.  But sometimes I worked double overtime and the pay would be the same as when I snuck out of the office for three hours to go read a book at a the bookstore.

    I noticed this too when I was working with real estate brokers ten years ago in 2004-2005.  When money is falling out of the sky, it doesn’t feel like that money is even yours.  These guys would change their cars every week and spend it every night at clubs of the gentlemanly persuasion.

  • A few times I was on summer junk trips in Hong Kong.  These are chartered boats you can rent, call up 50 of your closest friends, fill the holds with a few hundred pounds of food and booze, and anchor on some outlying island as everyone enters a state of drunken debauchery.Of course, not all junk trips involve alcohol, but because of the cost of chartering the boat, you need a lot of people to pitch in.  And it’s always been a surprise to me, the technology of boats; how a two story structure could remain upright as 50 humans writhe with the music all over it, do flips off the balcony, slip and slide and cry and kiss and fight each other on it.Anyway, the point is that these junk trips are for people of a certain income class.

    Because if you’re really rich, you’ll take your own yacht out.  Likely when you take a yacht out, you don’t need to assume the role of a club promoter and tap your second and third degree contacts in order to fill the boat.Because I don’t like drunken debauchery I used to float out in a foam noodle far away from the boats.  It would be peaceful, with the water a balmy temperature, and me and the noodle undulating.  Sometimes the current would make me drift towards the sleek yachts.  And when I would look at the yachts, there would be maybe 2-3 people on the deck, obviously not enough to replicate nightclub-like conditions, and their gaze would be…on my boat.

    Money can buy you isolation from the mundane and trivial, but I hope I always remain connected.

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Reviews 3.1.2015

The Art of Learning by Josh Waitzkin – the tactics used by the tournament hosts at the end are a bit enraging, but this is a great meditation on strategies and tactics you can use to excel in any field.  Here are some that stood out:

  • Using an interval-training-like tactic of brief, but deep breaks that punctuate periods of deep intensity.
  • To use your emotions rather than trying to ignore them through a zen meditation-like stance.  Channeling anger rather than trying to deny that the emotion exists.  This runs counter to the conventional wisdom of trying to remain composed and calm in every moment and is intriguing.
  • To find/define a slow zone, a state of mind in which you are completely comfortable and relaxed before important performances.  He describes a way to do this.

Antifragile by Nassim Taleb – while I enjoyed this tome most of all for its unveiled attacks on the economic establishment, the book discusses many important ideas, one of which echoes Josh Waitzkin’s training techniques above – the case for periodic stress, which strengthens certain systems.  This in contrast to applying a perpetually low-level intensity that has the tendency to make systems fragile.  I was also struck by how certain physical phenomena also become more stable when randomization (white noise, random shaking, etc.) is applied to it.

Spoon House in Gardena – this is Italian-Japanese food.  If I could speak to this owner, I would ask him or her an endless series of questions.  First, why on earth with the tastiness of your food haven’t you expanded?  How do you achieve such consistency in your pastas, where it tastes the same every single day of the year?  Where in the universe did you learn how to cook your baguettes in that way and what happened that one month during 2011 when your baker ‘was gone’ and you substituted those inferior dinner rolls for your manna-bread?  What else would you recommend on your menu besides the bolognese and carbonara, because I’ve been there a few dozen times in the last three years and cannot overcome the potential switching cost of ordering anything else on the menu?  What business in the world besides yours still serves a one-dollar salad on the menu?  What on earth is in that salad dressing?

Breastfeeding class by Susan Orr – We’ve been taking these kinds of classes in anticipation of our little one.  I brought in an iPad expecting to flip through it during periods of filler.  I never had the chance to turn it on, because Susan gave three hours a night, over two nights, one of the most engaging presentations I have ever had the chance to sit through, period.  She had the ability to make a class on the scientific benefits of breast milk and technical details of discharging it, incredibly engaging.  Speakers in general can learn from her mix of anecdotes, statistics and facts, humor, Q&A, and other stories.  Another lesson that the best speakers in general are those who know their craft and are enthusiastic about sharing it.

Young Titan by Michael Shelden – this book covers Winston Churchill’s early to late twenties.  I am struck by his love life, which was one series of rejections after another.  It humanizes him.  You can also observe where the rejections probably came from.  As a friend once told me, context removed, ‘you’re coming on too strong, man!’

LAX – For a second straight month, worst airport in the world.  The lack of a dedicated bus lane (where no other cars can drive) means that in order to pick anyone up, you have to swerve completely through (not into), a double-wide lane where shuttles for every major hotel, auto rental shuttles (of every brand), and parking lot (A, B, C) buses, are each individually stopping, overtaking and cutting each other off, stopping again, and trying to exit the lane, only after which you get to the inner lanes, where there is no space to actually pick people up because the police do not enforce the no stopping at the curbs, so people end up parking in the middle of the middle lanes to load and unload their passengers.  I understand the airport did spend millions on upgrades, but they went to no visible upgrade except into the new shopping mall built into the international terminal.

Parks and Recreation – I enjoyed the last season, but can’t get over the feeling that they should have ended it midway through Season 6.  With everyone in disparate locations, already having achieved varying degrees of success, it lacked a cohesive bond because there were layers of people and places to overcome when portraying the interactions between the original characters.  It lacked an immediacy.  I missed Ann and Chris.  I missed Ron’s metaphysical struggle between his libertarian beliefs and his job.  I missed Leslie Knope fighting the good fight against the ordinary and idiosyncratic citizens of Pawnee and Eagleton, rather than against bureaucracies and corporations.  I missed Tom’s irrational confidence as he was on the up-and-up.  I missed juvenile April.  I missed Ann’s house.  I missed the drab, boring office that kept everyone together.  I missed Pawnee itself as much of it was set in Washington.  I know it is standard narrative structure to have characters change, but not sure if it had to go on this long past their actual development.  All the original constraints had been removed and many people and situations were almost unrecognizable.  I love this show and all the people in it.

Glitch Mob’s Drink the Sea – on repeat.  This album, is a beautiful sequence of tracks that evokes every conceivable emotion, from joy to arrogance to paranoia to loneliness to excitement to an unbelievably bittersweet nostalgia, to which I shed tears at the end.  The last song reminds me of The Killers’ Everything Will Be Allright – a finale, like music being played like a radio transmission by the last survivor of a ghastly planet, and – bewitchingly hopeful.

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What piece of advice would you like to give to your 16 year old self?

Answer by Wonwhee Kim:

Thank you for the question.  The older I get, the more unqualified I feel to give advice.  I urge anyone reading this to take it with a grain of salt, as these are personalized to me, although of course I am writing with the hope that you may find it generally applicable. 

When I was 16, it was 1998.  Now, aside from the easy stuff of telling my past self to buy and dump all tech stocks as a sector by 2000, then pour the proceeds into commodities and real estate with an exit date of 2006, while sitting on massive long-term bond positions for at least the next 15 years, the real stuff has to take into account that when I was 16 I was in high school, in year 10 of a 12 year sentence in the public school system, and that is the defining precursor:

1. Unlike in high school, real life doesn't have a 'track'.  There are no milestones or markers at the end of semesters, years, video game-like progressions that tell you what a good job you're doing.  The grading system invites the mindset that your success is to be judged on a relative, rather than absolute basis. 

2.  On a related note, it always helps to have an understanding of the dynamics of any future situation you are entering, but especially when you're entering a very highly competitive game.  Admissions rates at highly competitive schools are between 5-10%, depending on surges of demand due to factors like recessions or demographic trends, offer rates at highly competitive firms can be as low as 1-2%, success rates of startups probably around the same low single digits, probability of becoming a pro athlete in any major US sport (except baseball) is around 1% even if you are a NCAA athlete, and so on.  So basically, your expected outcome is to lose. 

When you take a view of things like this, hopefully it becomes more like a game to be played – which it is – and less of a life-or-death situation where there are only binary outcomes, to either win or lose.  ‘Losing’ at games like this (which Peter Thiel calls tournaments/gauntlets) are not verdicts on your value or worth.  Move on and play another one.  Accepting this viewpoint  will help your mental health. 

3.  Fear and insecurity may cause you to choose the paths that everyone else is taking.  This is called following the herd, and that is never a good reason to use in making any future life decisions! 

4.  It may comfort you to know that the popular/cool kids do not seem to stay that way for very many years after graduation.  If you are one of them, though, let it be a reminder to start preparing for a second act.  Change is the only constant. 

5.  When you're a teenager, you act up because you want the attention, but at the same time, you are very insecure about how you are perceived.  It may either cheer or depress you to know that the prevailing sentiment in life after high school is indifference, in that no one cares about you, the way you look or dress, about your dreams or lack thereof, about whether you are doing well financially, etc., beyond a surface level.  The world doesn't owe you success, it doesn't even know you.  Think about that for a moment.  And it doesn't care.  So make us care. 

6.  Another point about image and being self-conscious.  People in general do not actually don't see you the way you see yourself, or want to see yourself.  A good friend is someone who will point out how people actually see you. 

7.  Unlike when I was in high school, it is commonly understood now that the brain is endlessly plastic, that neurons can grow and regenerate.  Don't put static labels on your skills or abilities, by saying you're either 'good' or 'bad' at them.  You will quickly become outdated if you don't continue learning, and you can always, always re-create yourself mentally and physically.  While setting aside 4 years to accomplish or learn something seems like a prison sentence when you're 16 (understandably, because it's 25% of your life), just know that it usually takes that long before you can really do anything of consequence in the real world.  People who look like overnight successes usually have a trail of blood, sweat, tears, and luck behind them. 

8.  On that note, always try to cultivate that which is unique about yourself. 

9.  'Doing your homework' means something different when you're older.  You'll be surprised at the sheer amount of ignorance and competence that exists in the world, not because people don't know what to do, but because they are too lazy or arrogant to do it. 

As an extension of this, it is really easy – in both college and beyond – to achieve the equivalent of a B (Pareto Principle).  This is the 80% complete, sufficiency level.  But how I interpret the principle is that sometimes it is easy to set yourself apart from the herd just by using things/materials that are already, just there.  This recalls Mark Cuban's RTFM (read the frickin’ manual) strategy (read Part 2 of this: SharkTank & Success & Motivation) which he used to achieve his first small successes.  I've used this principle in building a few businesses. 

10.  While the closed nature of high school society enforces punishment on people who cheat, steal, and mislead others, in real life there are less constraints.  You will almost certainly encounter deceit in all forms, many of which you have never imagined.  Be skeptical of people who have no skin in the game, in any field,  whether they are people trying to teach you or take your money.  You would think that it is easy to identify get-rich-quick schemes, but it is not.  Your emotions get in the way.  If someone does come to you with some kind of investment, consider for a moment that even the greatest VCs hit in the low single digits, that Warren Buffet probably sees hundreds of pitches a year and may only swing at one or two, and ask yourself what your probability of winning is, and if you can afford to lose 100% of your money.  Don’t let greed get in the way. 

11.  The world is not fair.  In fact, every society that has tried to create an equal society has always created even more inequality.  The only thing that is fair is that time passes at the same rate for everyone. 
 
12.  Don't let the combination of #5, #10, and #11 make you cynical, because the world is truly larger and more beautiful and profound than you can even imagine, perhaps than you will ever know.  Life post-high school is kind of like entering the Total Perspective Vortex (Total Perspective Vortex) , with less belittlement, and more awe-inspiring features built into it.  You will be surprised everyday.  Continue cultivating a sense of wonder and curiosity. 

13.  It's not 'cool' to be cynical.  You do this when you're younger to avoid disappointment, so you make fun of people who try.  Ask anyone over the age of 20 – slackers aren't cool.  The world belongs to those who hustle. 

14.  So…don't make the mistake of thinking that because it doesn't exist, it's impossible.  Think about everything in the world that exists today, and think about whether it ever…didn't exist. 

15.  In relationships, when people don't invest in you to the same extent you invest in them, I'd call that an unfair trade.  Or even a swindle.  Try to move on.

16.  You will end up with the one you deserve.  No one is going to 'see' the real 'you', be attracted to all sorts of unknown attributes that you didn't communicate, and be the perfect person for you.  Even the best relationships require some work.  But when it’s bad, have the courage to walk away.  And when it’s good, have the courage to stay. 

17.  At your age, the cost of picking up all sorts of options in the form of skills, experiences, contacts, etc., is low, almost free.  This is a combination of your minds working like vacuum hoses and you surging with insane levels of energy (these are your advantages), and your lower opportunity costs (unless you've started a huge enterprise or have family to take care of).  This is the reason why people older than you fall behind in technologies, why some older people don't have the time to go back to school, why they stagnate at the level of their incompetence (see Peter Principle ).  When you’re young, pick up these options.  Sample and experiment.  Having options like this + serendipity will result in all sorts of outcomes you can’t imagine now.  I’m reminded of Steve Jobs’ commencement speech when he said the Mac wouldn’t have had beautiful fonts if he hadn’t dropped in on a calligraphy class…

18.  Exponential growth is something that people have a hard time understanding.  But as a thought experiment, consider that if you got even 1% better every day, you'd be 2x better in about 8 weeks. 

19.  Appearances at your age will change dramatically so don’t be so insecure about them.  The same droopy eyes the guys made fun of as a kid will be sultry ones that will break their hearts later.  That skinny boy in the corner will fill in.  Baby fat melts away.  Jawlines become defined.  You start becoming more comfortable in your bodies, in your voice, and that single change of greater confidence and assurance, more than anything, enhances your attractiveness. 

20.  You can't wait for certainty.  Don't hold yourself to that standard, and don't be afraid to make mistakes.  Life decisions are by definition ones that have no clear answer.  Once you start making these decisions, and start tasting the consequences of your choices, congratulations, you have experienced adulthood. 

But when you are completely, absolutely stuck, with two options about dead-even, I would advocate using the strategy written about by Nassim Taleb in Antifragile for the Buridan’s ass ‘paradox’ (Buridan's ass) – just choose a random direction and swiftly kick the donkey (in this case, you) in that direction.  Waiting is also always an option, but I'm assuming that you have eliminated that one. 

21.  A long time ago I read a quote by an athlete saying that as a kid, he had a vision of the type of person he wanted to be – and although he didn't know exactly how, by kind of always holding that vision in his mind, he had slowly become the man he wanted to be.  I am finding this to be true.  When you ride a motorcycle, you look left, you go left.  Tony Robbins puts it another way: where focus goes, energy flows:
https://www.youtube.com/watch?v=WpKltuQd0qQAnd that energy is the building block of creation.  Don’t waste it. 

22.  I had the most vivid dream a month ago, which was the impetus for me to start writing an answer to this question.  It was a dream about the house I had grown up in, when I was 16.  There was my mom when she was young, when she had the energy of a much younger woman, there was my dad, when he had much fewer gray hairs, less wrinkles, with a bounce in his step, with the energy of a much younger man, and there was my sister, when she was still my kid sister, running around.  It was one of many points in time when I had been looking so hungrily ahead, dreaming of how great the future was going to be, that I failed to realize how really perfect that moment was too.  And that moment will never come around again.

So enjoy the journey.  As Cervantes said, the journey is better than the inn (a quote by Miguel de Cervantes Saavedra). 

Hope this helps!

What piece of advice would you like to give to your 16 year old self?

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Reviews, 1.25.15 Edition

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How Asia Works – I enjoyed this book especially for its unveiled assault on economists.  Points that I found especially interesting are at the end of this post, because it’s long.

The Party – China’s is not a government based on consensus, on transparency, or even on consistency.  That may be obvious, but what this book made me realize is that it seems the CCCP has only one of two MO’s in China: total control, or abdication of it.  For purposes of self-preservation, they cannot choose the latter, so it’s basically all or nothing.

The Little Prince – I finally read it for the first time two days ago.  ‘What is important is invisible’.  This is about love bridging the vast distances between people, who are little islands, little stars or planets of themselves.  Love turns undifferentiated beds of roses into twinkling stars.  St. Exupery was an airline pilot, spending lots of time flying alone over the lights of the earth, traveling all the time – for a superb treatment of this, read Wind, Sands and Stars.  His work resounds with a sense of loneliness as a result.  But it imbues his stories with a sense of gratitude, almost love.

Sleepcycle – an Android app that has been working well for me.  It uses the accelerometer to monitor the lightness/heaviness of your sleep, and wakes you up during the lightest part of it.  For the past 7 days, I have avoided that heavy, groggy feeling that lasts the entire morning when woken up during the wrong part of the cycle.  This has helped me realize that ‘sleep’ is actually a connected string of multiple cycles, rather than just one continuous, unbroken strand.  Also, that having a variable alarm clock is probably better than trying to wake up at the same time every morning.

Shanghai Number One – Excellent dim sum, despite its reviews (on Yelp).  Ratings for dim sum around San Gabriel and Alhambra seem a little skewed downward in general, maybe from the perception of service and the difficulty in communicating with the servers.  I would rate this at minimum a 4, if not 5 on Yelp.  Excellent.

Thumbs Down
LAX – another month, another few hours spent in the airport that has a fair shot of being the world’s worst.  When a high-pitched alarm is going off inside the terminal because someone has accidentally or illegally opened an alarmed door, why does it take 10 minutes for someone to shut it off?  Why are airport employees just sitting around, walking idly by while the alarm sounds like an eardrum-piercing needle?

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Things I’ve Learned as a Consultant – Part II

  • As an extension of the last point of the last post, when you’re in professional services, whether banking, law, design, consulting, whatever, you’re trying to sell someone something that there are no physical results of.  And sometimes, not even precedents.  You’re saying ‘trust us’.  So how do you build that trust?  A brand goes a long way.

  • But having been on both sides of this – the salesman and the person doing the contracting/hiring, I believe the absolute best thing that will help you nail the pitch, without question, is a sample.  Samples are the strongest test, for the simple fact that having something that addresses the requirements perfectly makes you impossible to ignore.  This not only makes them know you are capable of doing the job, but that you’ve listened.  It is a rare client that knows 100% exactly what he or she wants before the service has started, because as I’ve written in the previous post, clients engage you based on a dark nebula of capabilities they imagine you can do.  In the beginning, it is important for them to know that you are responsive, that you can react to their feedback.

  • But I cannot stress this enough:

    “Let em test the product, give em a promo show/Just a breeze, not enough to catch a real vibe/Then we drop a maxi single and charge em two for five/Ain’t tryin to, kill em at first just, buildin clientele/So when the album drops the first weeks it’s gon’ sell” – Jay-Z (Rap Game/Crack Game)

    The reason is that if you have a sample or a pitch that addresses their requirements, it will cause them anguish if they have to pick someone over you.  It will cause them to justify their own metrics.  You will be remembered.

  • If you are in a profession that does not allow you to provide a work sample, just be aware that a buyer of services, especially if they are purchasing a particular service for the first time, will latch onto other things (attribute substitution).  For example, how polished of a speaker are you?  Do you buckle under pressure?  Do they like you?  Do you have the proper gravitas?  Are you older, do you have a few grey hairs?  Many of them are unfair and irrelevant, but this is what happens, so it helps to be aware.

  • Related to that last point, there are people in the consulting business who dye their hair grey and wear glasses in order to appear older and more experienced.  Just saying.  When you’re a bright young person it’s easy to become disillusioned about this.  But if you encounter this situation, it is better to step back.  What is it really telling you?  That as much as you think clients are paying for the actual insight, they’re paying for reassurance.  They are buying the brand.

  • The higher your fee, and the longer you take, the higher the expectations of your client.  They will grow.  And grow.  It is better to program in interim deliverables to anchor their expectations early and allow for feedback.  This is as a result of differing perceptions of time between those in the flow of doing work, and those waiting for something.

  • But curiously, even if you are able to finish something ahead of schedule, having any extra time left leads to doubts.  You’ll check and recheck your work.  Due to Parkinson’s law, the project has a good chance of actually always ending up taking the amount of time allotted to it.

  • Everything is about good communication.  It’s not just about having the facts or a superior product.  You can have a superior product and still lose the pitch, you can have all the facts and insights but fail to engender understanding.  And you can have titular authority in your firm, but fail in managing or marshaling the resources of the people under you.  Good communication includes soft skills, connecting with people, speaking with enthusiasm, being authentic, etc.

  • Smaller clients are good because often you work directly with the person who is both the decision-maker and stakeholder in the service.  But smaller clients have less to lose when they try to negotiate your fee – down – after you’ve already performed.  They can also be demanding, and your interactions will be subject to the whims of the person buying your service, who is often the same person writing your check.  Big clients will often have no problem paying you, but because the stakeholders, decision-makers, and people you are interacting with can be three different sets of people, the layers of hierarchy and management can lead to confusion, delays, conflicting directives, which ultimately means, more time spent on it and more work for you.

  • Since consulting is the business of selling brains, the necessary conclusion to this premise is that the better the brains perform within a given length of time, the more value you can capture, and the less costs you incur.  Research has shown that cognitive thinking is a physiological process, meaning it’s another body function regulated by energy levels.  Keep up your energy levels and you have the potential for longer periods of higher thought.  Exercise, meditate, eat right.  This cannot be stressed enough, and goes back to the athletic component of traveling for consulting.

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Things I’ve Learned as a Consultant

  • As in any other job, being good at the job is a process, not an outcome.  Pursuit of the frontiers of the field, a focus on incorporating new ideas, relentless introspection and feedback, hard work, and constant improvement of technical skills will help you stay ahead.

  • Identifying and improving the necessary technical skills was the easy part.  Merely recognizing what the other necessary skills were, like salesmanship, self-discipline, introspection, hard work, was harder, and it was hard to miss that I didn’t even have them.

  • Consulting is a lifestyle choice.  This is not only when it comes to travel, although that is a significant portion of it.  The consulting lifestyle revolves around the project lifecycle.  It starts with the pitch and sale, moves onto research and analysis, and concludes with presentation and feedback and iteration – with different required skills in each portion of the cycle.

  • When extensive travel is required across multiple time zones, being good contains a physical, athletic aspect to it as well.  Maintaining clarity of thought, focus, and polished communication skills when I am physically in a meeting with a client while my biological clock is deep in an REM cycle, is as physically demanding as being in minute 32 of an intensive Muay Thai workout.

  • There is another, longer cycle, which is the lifecycle of a consultant himself or herself.  As an entry-level person, you are primarily engaged in research, analysis, report preparation.  As you progress out of the back office (figuratively speaking) and into more of a client-facing role, you are called on to do more meetings, pitches, presentations, face-to-face communications with the client.  Before you know it, your job is no longer research and analysis; it turns into that of a representative, salesman, and manager of the younger versions of you.  As with the project-cycle, different skills are required at different points in the cycle.

  • There are several things about the nature of the job itself.  First, a consultant is a paid outsider, so that no matter how convincing you are, nor how much you know, you have no inherent power to actually implement your ideas.  Clients can and will ignore your advice.  This can be demoralizing.

  • Another important thing about the nature of the job itself is that that you’re in the business of selling time – your time, which is finite.  Consulting is the business of selling your capabilities to achieve a recommendation, insight, or strategy, which in itself is the product of human minds working in real-time.  If that sounds vague, that’s because it is.  And because what you’re selling is so undefined, there is naturally a huge variability to it, regarding both the actual product and your client’s expectations.  Managing both of these things becomes a huge drain on resources and time.  Clients will, almost as a rule, demand that you do anything and everything for them that they’ve seen you do, read about you doing, heard about you doing, and imagine that you can do.

  • Because of this variability (also known as customization), scaling a consulting practice is difficult.  Consulting is the business of leasing a limited portion of human brainpower for a limited period of time to accomplish a task.  Unless the human brains in your employ can be programmed to think faster and more effectively at the same time, increasing the productivity of the fundamental resource (brains) has natural limits.

    But scaling can be done, and in order to do so, the metric that I find natural and easy to focus on is the implied professional fee that is being charged to the client.  This can be done in almost any service industry: think about what you’re charging the client in terms of an implied per hour cost.  Take your fee and divide it by the number of hours you or your people will work.  Whether it is $100, $200, $500, $1000+, the principle is the same.

    If you want to scale and grow, you need to ruthlessly outsource tasks that can be performed at an equivalent level to those with the lowest rate.  If your rate is $500/hour, does it make sense for you to be doing document preparation or formatting that you can pay $15 to $20/hour for?  Or even to be maintaining a model yourself?  The argument to this is that by removing yourself from the work, the overall work will lose quality.  As a thought experiment, does a film lose quality because a director is not doing the cinematography or acting himself?  This is a big problem in small consulting companies where everyone is expected to do everything.  My experience has suggested to me that this is immensely inefficient.

    Merely going through this exercise will force you to develop systems, templates, methods, and training, which will increase the productivity of the entire team.  Another issue at play here is the sheer economics of batch tasking and the costs of switching.  Switching tasks incurs mental and thus temporal costs.  Even if, theoretically, there were a ‘superstar’ consultant who could do each of 5 individual tasks at a superior rate than anyone else in the organization, this person may still be slower to complete the entire ‘set’ of tasks than 5 different people specializing in those tasks, because of the switching costs.

    This is the kind of issue you deal with as you make the transition from entry-level positions to higher ones, and you’ll have to abandon old habits and gain new ones.  This is the kind of struggle you experience at any professional services firm.  Where you go from being a person who produces work, to the one who guides and oversees it, and then finally who ‘manages’ and sells it.  You remove yourself from the work that you were originally hired to do, and you need to develop new skills to adapt.

  • It may very well be the case that you are content with the level of sales and work-to-reward ratio you are experiencing.  Then none of this applies.  But in a changing world, stagnation is by definition a regression.  To even keep up, we must keep growing and optimizing.

  • More on people – who as brain-carriers, are a consulting firm’s primary asset, as the saying goes.  Programmers talk about the 10x programmer, and to a certain extent I believe this is true of people in any service-oriented industry.  Performance conforms to a distribution with fat tails on either end.  80% of the people are in the middle, which does not imply mediocre.  It just means everyone is clustered there.  Then there are the 1-5% who are outliers in either direction.  Alternatively, if you think about the 80/20 rule, it is saying that a sufficing level of work, the 80%, is easy to achieve.  This is the equivalent to getting a solid B in a bell-curve weighted class.  I hated this system in college, by the way.  But the 20% is the spread field, where you distinguish yourself from others.  It’s a wide open field.  20% is the details, and this is where people differentiate themselves by adding more value than others.

    Think of it this way.  Say you hire a painter to paint your walls.  Both cover the walls in paint, but one of them pays attention to the details.  He covers your existing furniture, he pays attention to the finishes, making sure the edges and corners are perfect, nothing is smudged, no glue is on the ground, nothing has been broken, making sure there is absolutely no blemish anywhere, everywhere.  Conscientiousness and care go a long way in differentiating yourself from the pack.  To use a consulting example, at the analyst level, this would be someone who works faster and harder than others, builds new frameworks and approaches, even while paying attention to formatting and presentation, to typos, wording, someone who builds models that can be easily followed by others, someone who integrates frameworks located across different sources, someone who doesn’t hard-code inputs in Excel, etc.

  • All of the above is in the name of widening the gap between implied hours charged for, and hours actually worked.  The other way to do this, obviously, is by increasing the number of implied hours charged for; i.e. charging more.  The easiest thing to envision, in theory, is the hardest to pull off, and this is to develop a truly unique skill.  A moat skill, a monopoly skill, one that no one else has.  As in the story of the repairman and the hammer.  When you develop a skill like this, you can charge whatever you want.  But this is incredibly difficult to do.

  • The more realistic thing that can be done is develop a brand and a reputation for good work.  A brand is something that does marketing for you even while you sleep.  A brand helps you charge more for work of an equivalent quality, because in consulting, the hardest thing to realize is that people are not buying the service itself – they are buying the reassurance.  This is why lawyers can get paid even when there is a risk of losing, and consultants can get paid when there is the clear possibility of finding nothing new.  This relates back to the old saying that consultants are in the business of using the client’s watch and getting paid to tell them what time it is.  But people hire them anyway.

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