- Leandro Herrero - https://leandroherrero.com -

Madam, the ribbon is free.

Discovering’ an old article that I wrote years ago, when I used to have a management column in a monthly pharmaceutical magazine, I can see how some of the themes that were pertinent then, are still relevant today. Remember the noise about the ‘knowledge economy’? Who would challenge this today?

Here is the story I told then. A rich American lady visits the most famous hat maker in Paris. She sees a beautiful, exquisite, long ribbon and immediately falls in love with it. The hat maker takes the ribbon in his hands, does a few twists with it and creates a stunning hat. Brilliant! The lady grabs it immediately. How much is it? she says. Five thousand Euros, the hat maker says. Five thousand Euros! the lady exclaims, but, it’s just a ribbon! Madam, the hat maker says, the ribbon is free.

The consulting world, where I navigate today, is a terrible place for hat makers. I’ll explain. ‘Consulting’ has developed a market focused on the quantifiable delivery of ribbons (pink, red, small, big, 20, 200, 1 consultant, 3 consultants, 300 consultants, 300 hours etc.…) ‘Delivery’ has become part of the language.

I am a Procurement Department’s nightmare because I challenge the daily rate, the number of days, the number of members of my team, the quantification of the ribbons. I provide the knowledge and the skills to work together with the client focused on an outcome. Madam, the workshop is free. I can understand, that if you sell boxes of biscuits, you would do so on the basis of the number of boxes and the number of biscuits, and, perhaps, the cost of the lorry to get the biscuits to you. But I challenge the application of ‘the delivery model’ to strategic advice, leadership development, organizational strategy and working closely with a team to make it successful. But this is only a 20-page report! Madam, the report is free. But this is only half a day with the team! Madam the meeting is free.

Am I alone in this? Surgeons, schools fees, works of arts, brand creation, executive search, these are examples of work done and priced on value, not on effort and ‘units of work’.

Just because the number of hours, number of days and number of anything is easily quantifiable, whilst  ‘value’ is much harder to measure, it does not mean that we have to take the easy route.

Starting with ‘the value question’ is the right start: employees, partners, activities etc. When I got immersed in Decision Analysis many moons ago, I learnt that people can distinguish well between preferences, and that, in doing so they are ‘measuring’ their reality.  I prefer this kind of value to that kind of value is as solid as a numerical comparison. It’s worth making the effort of comparing the value of various options: of doing A vs. doing B; of doing X vs. not doing it at all. I have come back to the ‘Madam the ribbon is free’ approach many times in my life. It has always kept me on track to keep my focus on value, to see it, to smell it, to decide on it. Not necessarily on numbers.