[I’m not naming the company in my example because it has since changed strategy and leadership following the events described below]
A few years ago, a 100-year-old multinational hired a top-tier management consultancy to help it navigate an existential strategic shift. On paper, it was a model engagement. It was certainly high profile and extremely lucrative for the consultancy, who fielded a huge project team. And yet the engagement didn’t just fail to protect the organization. It actively reduced its ability to adapt at precisely the moment adaptability mattered most.
This wasn’t because anyone was stupid. Quite the opposite. The work was too clever.
Hidden Gold sitting in a Consulting Blindspot
As I wrote in my book Start With What Works, every established business contains Hidden Gold: overlooked, under-appreciated assets and insights.
Golden insights often look like this:
- Local trade-offs that never make it into formal models but must be made nonetheless.
- Weak signals that are better responded to earlier than later.
- The know-how of people who understand the ways things actually work, as opposed to merely how they’re supposed to.
This intelligence is distributed, uneven, partial, and often unarticulated. It doesn’t sit neatly at the top of the organization.
And here’s the inconvenient truth: Many large consultancies are structurally blind to this kind of value.
It’s good to be rational, but it’s dangerous to be rationalist.
Rationalists are people who mistake a coherent story for the way things really are.
It’s easy for the top consultancies to become rationalist machines. They brilliantly:
- Produce clean, abstract versions of messy reality
- Package what can be neatly presented to senior decision-makers
- Create PowerPoint narratives of apparently unassailable logic
And there’s a strong temptation to write the story first and then go and hunt for the evidence – a recipe for confirmation bias.
In the case of our century-old multinational, the consultancy produced a compelling strategic argument. The CEO bought it and sold it to the board.
But many people in the organization had well-founded reservations. The trouble was their reservations weren’t considered. Why not?
The danger of clever people when they’re wrong.
Clever people who are mistaken are dangerous, because they come up with winning arguments to defend their mistaken views. The consultancy had teams working throughout the organization who skillfully challenged objections to the narrative, and amid the disruption of a major restructuring, insiders reported that meaningful debate became impossible. Questioning the direction was effectively off-limits. Sadly, the analysis was repeatedly ‘refined’ until it supported the conclusion.
The CEO didn’t last much longer, but the company now has to grapple with his legacy. They’ve unwound as much of it as they can but are far from being out of the woods.
Clever People, Bounded Intelligence
This is the paradox: You can hire extraordinarily clever people – inside and outside your business – and still end up with unintelligent action.
Not because anyone is incompetent. But because rationality (good) easily slides into rationalism (bad). Rationalist approaches over-privilege what they can see, measure, and justify. But they under-value what only emerges through participation, experimentation, and distributed judgement.
People sense what side their bread is buttered on: the more sure of itself the centre becomes, the quieter they get. At worst, the centre is where adaptability goes to die.
Protection questions…
The most resilient organizations don’t rely on clever people (or clever machines) to do all the thinking for them. They design conditions where the organization can think with, and for, itself.
Ask yourself:
- “Is the story we are telling ourselves so neat that we don’t want to hear facts which would mess it up?”
- “Where in my organization is intelligence trapped?”
- “What Hidden Gold might we already possess – if only we knew how to bring it to the surface?”
Pick one of these questions and ask it in your next leadership meeting.