Coriolanus and Corporate Strategy
Christopher D. McKenna’s 2006 history of management consulting The World’s Newest Profession contains a discussion of McKinsey in the 1960s. Consultants had always had to dress up their work, make it seem more mysterious and professional than it was; for instance, the historian Judith Merkle called Frederick Winslow Taylor’s turn-of-the-century consulting practice “an entrepreneurial scheme for selling organisational methods as science.” As such, in 1945, Marvin Bower, McKinsey’s supreme leader, felt the need to emphasise professionalism to his firm: “We do not have a business; we have a professional practice.”
By the 1960s, McKinsey was selling a specific product: American management know-how, especially to Europeans, and especially the art of corporate reorganisation. Conglomerates were in fashion, and executives wanted to learn how to decentralise their business in the modern fashion. Part of the product being sold, of course, was McKinsey itself; its professional corporate culture. Marvin Bower enforced a strict dress code of dark suits and hats, and “emphasized professional language, professional metaphors, and professional comportment as central elements in the firm's initial socialization of its new consultants.” Conformity - what McKenna calls McKinsey’s “gilded cage” - extended to hiring. In 1968, 121 of McKinsey’s 358 management had attended Harvard Business School.
Reflecting on McKinsey’s homogeneity, McKenna has this to say:
Students of corporate management are taught that the best way to identify a core competence—the quality that distinguishes you from your competition and defines your competitive advantage—is to look for an organization’s greatest apparent weakness over its long history. Why else would an organization tolerate this obvious flaw except that it provides tremendous benefit? In 1960, just like today, there was no question about the core competency of the leading consulting firms, because their distinctive corporate culture was simultaneously their greatest asset and their most glaring Achilles' heel.
In the case of McKinsey, the obvious flaw was the homogeneity of its people; of course it’s wrong that they’re all white Harvard men! And yet those people embodied the culture that customers around the world were flocking to buy.
An organisation’s competitive advantage is found in its greatest apparent weakness. This isn’t just business; this isn’t just ‘increase revenue and decrease costs’; we’ve moved into the realms of philosophy. Can McKenna’s assertion be true? What would it mean if it were true? In the rest of this essay, I’m going to pull on these threads.
When McKenna appeals to “students of corporate management”, it’s possible that he’s referring to the work of Michael Porter. In a five-part 1996 article entitled ‘What is Strategy?’, the HBS professor lamented what he saw as an over-emphasis on tactics at the expense of strategy:
Although the resulting operational improvements have often been dramatic, many companies have been frustrated by their inability to translate those gains into sustainable profitability. And bit by bit, almost imperceptibly, management tools have taken the place of strategy. As managers push to improve on all fronts, they move farther away from viable competitive positions.
Competitive positioning, then, was in Porter’s eyes more important than operational efficiency; and positioning involves making tradeoffs. Any business that has a unique strategic position chooses to do one thing, and not another; to say Yes and No (we’re back to philosophy!). Strategy sets constraints, operational efficiency works within them; Porter wanted to refocus the business community on strategy.
If strategy is about saying Yes and No, then one can see how strengths might be connected to weaknesses; your strengths are the things you say Yes to, and your weaknesses are the things you say No to. By taking a strategic decision rather than “push[ing] to improve on all fronts”, business leaders leave themselves open to the critic who gestures at one of those fronts, and airily asks, “Why aren’t we pushing here?”
I’ve talked about Chesterton’s fence before, but the concept seems relevant here: the critic pointing out “obvious flaws” might not be aware of the strategic decisions that produced them. We could also introduce the concept of bike-shedding: the phenomenon whereby critics tend to focus on the least important aspects of a question, because those aspects are also the simplest. For example (from Wikipedia):
A fictional committee whose job was to approve the plans for a nuclear power plant spending the majority of its time on discussions about relatively minor but easy-to-grasp issues, such as what materials to use for the staff bicycle shed, while neglecting the proposed design of the plant itself, which is far more important and a far more difficult and complex task.
In the case of Chesterton’s Fence, the focus area is important but poorly-understood; in the case of bike-shedding, the focus area is unimportant, and for that reason well-understood.
Returning to McKenna’s idea, we can see that the most strategic organisations are particularly vulnerable to Chestertonian critiques, because their flaws are so obvious. It perhaps also follows that the most difficult and painful aspects of a job - pain that persists, pain that isn’t smoothed away over time - might also the most valuable.
To give a concrete example from my current work at Palantir: because we configure our software for each customer, we often don’t have an oven-ready, pre-prepared point solution. When we find ourselves competing with point solutions, it’s easy to bemoan that customisability, because it can feel like duplicated work. And yet in that pain of shaping the product for the customer’s actual needs, rather than the needs some PM assumes that they might have, lies the essence of forward deployed engineering. That’s why we talk about eating pain and excreting product; pain is the essence.
Our CTO Shyam often refers to a quote by Greg LeMond: “It doesn’t get easier, you just get faster.” That might seems to be in tension with my essay about talent, which argued that you should find what’s easy for you but hard for other people. To make the point, I quoted a 2014 Scott Alexander essay:
Just as drugs mysteriously find their own non-fungible money, enjoyable activities mysteriously find their own non-fungible time. If I had to explain it, I’d say the resource bottleneck isn’t time but energy/willpower, and that these look similar because working hard saps energy/willpower and relaxing for a while restores it, so when I have less time I also have less energy/willpower. But some things don’t require energy/willpower and so are essentially free. Writing this is my addiction, so it’s free. Doesn’t mean anything else is.
Alexander’s point, though, is not that it gets easier; it’s that it should start easy. I’m sure that Greg LeMond finds cycling up hills slowly pretty easy; the difficult part is cycling up hills faster than anyone else. If you’re going to win the Tour de France, you need to be extraordinarily talented, and you need to endure extraordinary amounts of pain.
Great men and established companies have a competitive position; they have entrenched strengths and weaknesses that are caused by the same underlying strategy. A causes both B and C. In this piece, written in May, I wrote about the strengths and weaknesses of three great men: Coriolanus, Robert Moses, and H.L. Hunt. That essay, I think, made a weaker claim: that even though it’s hard to discern the link between these men’s strengths and weaknesses, it might still exist. Perhaps a propensity towards having multiple concurrent families might be caused by the same impulses that lead to success in the oil industry. It’s certainly difficult to make the argument that these men’s arrogance, and racism, and bigamy might actually be inseparable from their achievements - but that’s why it’s such an interesting argument to make!
The two quotes with which I finished that essay offer two different angles on the same question.
You can't hold it against a man for possessing and being possessed by all the component and conflicting parts of being a genius. It's just that sometimes it is difficult for mortals to live with.
Margaret Hunt Hill, quoted in The Big Rich, p.52
One fire drives out one fire, one nail one nail;
Rights by rights falter; strengths by strengths do fail.Shakespeare, Coriolanus, Act 4 Scene 7
Margaret Hunt Hill, H.L. Hunt’s daughter, thought that her father had some ineffable genius which caused both his strengths and his weaknesses. Shakespeare, by contrast, saw weaknesses as over-extended strengths. For Hunt Hill, A caused both B and C; for Shakespeare, A causes B which causes C. McKenna’s view of corporate strategy is the former.
It’s tempting to map this back onto oneself; are our strengths and weaknesses already determined? I think there’s reason to be optimistic. Old men and established companies are set in their ways, but young people and inchoate companies are malleable and agentic. As we look into 2025, we should be hopeful. As Nietzsche put it, der Mensch das noch nicht festgestellte Tier ist. Man is the still-undetermined animal.