The Inverse Curse of Cassandra

 

In my previous blog I compared and contrasted consultants who provide valuable information with those who provide a narrative as a contest between Gandolph and Grima Wormtongue from The Lord of the Rings trilogy. Now I’d like to take that analysis a bit further by again invoking another character from epic literature, Cassandra.

Cassandra was the daughter of King Priam and Queen Hecuba of Troy. As seems to be the case with every female renowned for their beauty in Greek mythology, she was desired of the gods, specifically Zeus, who granted Cassandra prophetic power. When she subsequently rebuffed his attempts at seduction, Zeus added a curse to her – she would retain her prophetic power, but none would believe her.

Now, if there (in mythology, at least) exists those who are right but not believed, the inverse of this curse – far more deadly, in my opinion – is that there are consultants out there who are usually wrong, but are always or often believed. This is undeniably true. There are simply millions of people whose internal narrative is chock full of delusions, many of them rather preposterous, who yet influence decision-makers who, in turn, have impacts on our lives. Does anyone remember Carl Sagan predicting that the fires from the oil rigs set alight by Sadam Hussein’s troops at the end of the first Gulf War would lead to an environmental disaster, similar to the (also fraudulent) “Nuclear Winter?”

Consider the asset managers’ axiom, that the point of all management is to “maximize shareholder wealth.” Umm, no, it’s not, and it’s provably not. Look at what happens in a hostile takeover. The targeting company is willing to spend considerable sums of money to purchase a controlling share in a rival, and subsequently liquidate its assets. At the beginning of the attempt, the targeted company’s shares usually jump in price. Isn’t this good for the targeted company, by the asset managers’ rule? Yet somehow, mysteriously, the targeted company will often resist, and a favorite tactic is to take a “poison pill.” A poison pill in business refers to a company’s attempts to make it a less attractive candidate for takeover. It involves taking on significantly more debt, since, unless you’re an American car manufacturer, liability owners must be satisfied prior to equity holders in any bankruptcy proceeding. So, if the point of all management (their usage, not mine) is to maximize shareholder wealth, then no targeting company would ever initiate the attempt, and no targeted company would ever resist. And yet the attempts are made and resistance offered over and over again. But the asset managers’ axiom still undergirds much of what passes for contemporary business theory as well as a significant share of the business schools’ textbooks, textbooks written by Ph.D.s from very prestigious schools.

My regular readers know that there is no way that I can have a discussion of consultants who are usually wrong but often believed and leave out risk managers. The notion that the future will unfold bounded by the precepts of Gaussian curves is, well, idiocy, and yet it’s highly coveted idiocy. Maybe it’s their jargon – all that talk of “80% confidence intervals on the cost baseline” works on those unfamiliar with relevant management science information streams like catnip. Another possibility has to do with the searing, sneering treatment of those who recognize current risk management theory as the farce that it is from its practitioners. In my previous gig, as columnist for PMNetwork magazine, it was almost automatic: refer to the risk management types in any way that even slightly implies they might, just might have it wrong, and the nasty e-mails would pour into my e-mail account. The other columnists from that time have told me of similar experiences.

No, the answer to being able to realize when your consultant is providing high-sounding irrelevancy is to…

Oops! Out of time. I guess you could look into my must-have book, Game Theory in Management, or wait until I get around to addressing this more specifically in this blog.