Month: August 2019

With Labor Day coming up in the United States, I’ve been reflecting on the big questions that affect us gig economy workers. These include what is perhaps the central political question in gig work, one that Labor Day is the perfect occasion to ask:

Are we gig workers part of labor, or are we part of capital?

For our purposes, “capital” is a loose category which includes the professional managerial/leadership class, as well as the share-owning class. Labor includes anyone for whom incentives suggest collective action as a good general strategic approach to achieving political goals, and whose share of capital ownership is too small to make a difference to their political goals.

So which are we? Capital or labor? The short answer is, we are neither. We constitute a separate emerging political class I call the clutch class. It is a politically loaded answer that I suspect will lose me a bunch of subscribers once I explain it, but so be it.

The New Class Wars

Besides Labor Day, two contemporary developments in the US make this question particularly salient and urgent right now.

• In California, there is an effort underway (the AB 5 proposal) to make it much harder for companies to classify workers as independent contractors. Companies like Lyft and Uber are at the center of the battle. Proponents of the bill argue that rideshare drivers should be reclassified as regular employees. Opponents (including the companies) argue that most of these workers do not in fact want to be regular employees, since the flexibility of gigwork is what drew them in the first place.

• There is movement on the other side of the management/labor divide as well. A group of 200 CEOs recently signed a letter proposing that all stakeholders, not just shareholders, should matter. In practice, this translates to “managerial class should have more power,” since they are the de facto representatives of all non-shareholder stakeholders, such as employees, customers, and the general public. It is a shot across the bows of activist shareholders.

In short, like it or not, a new kind of class warfare is getting started in the economy, and opening moves are being made by both the traditional classes.

Given the way politics around the world is shaping up, this war can only heat up in the next few years, not cool down. And the outcome will depend in large part on what we gig workers decide to do.

So where do we gig workers stand on the matter?

Well, that depends on where we sit, as one of my wise buddies, Carlos Bueno, likes to frequently remind me.

Where We Stand, Where We Sit

No matter which way you lean in terms of sympathies (I’m running a twitter poll on this, go vote), there is an objective correct answer: we are neither labor, nor capital. We are what I think of as the clutch class, in two senses of the term.

• If you think of organizations as cars, a good mental model of the politics (not economics) of work is that capital is the accelerator, labor is the brake, and middle-management is the gearbox. And we gigworkers? We are the clutch. We help disengage/re-engage the drivetrain during gear-shifting, as operating regimes change and organizations need to adapt behaviors.

• There is a second sense in which we are the clutch class, in the sense of the sports slang term: we are typically roped in to break stalemates and frustrating equilibriums, and actually make things happen and deliver some high performance during critical periods.

Both senses of the word should suggest a very uncomfortable relationship to labor movements and socialist politics.

Are We Scabs?

For a true socialist, the harsh view of us gig-workers who actually like what we do is that we are a generalized descendent of scabs.

This possible perception may or may not bother you (it doesn’t bother me), but it’s an interesting one to think about.

Though we don’t always act in ways that are against the interests of the organized (formally or informally) labor class that has incentives to organize for collective action, and meaningful mechanisms (though much weakened since the 70s) to act through, the default perception is…not wrong.

The defining characteristic of a scab is striking a self-interested independent bargain with the capital-owning/managing/leading class that breaks from any larger collectively bargained deal.

This defection does not have to be from a formal contract between an organized labor union and the managers/owners of a company. Even informal expectations around non-unionized jobs (including high-skill, high-education white-collar jobs, shaped by an elite culture of norms and conventions), are effectively an emergent collective bargaining outcome. The interests of individuals are subordinated to those of a larger group through various organic and designed mechanisms, and individuals generally go along with the collective flow, whether or not it’s led by union-type structures, and whether or not there are hard or soft coercive forces at work.

For example, a few years ago, when wage-limiting collusion was exposed in the tech industry, high-paid techies, not generally given to labor-like sentiments, were as outraged as striking factory workers. And that outrage had an effect even though it wasn’t channeled down traditional industrial action mechanisms. That kind of loose collective employee activism is becoming increasingly common around all kinds of political issues that affect workplaces.

This defining characteristic of scabs is also the defining feature of the gig-worker class. We defect from collective actions and trade off higher security, better benefits, and lower personal overheads, for two things:

1. More personalized working conditions built around desiderata that may not be shared by any larger group

2. Continuous, independent maneuvering capability where aligning interests with a group might require too much lock-step marching, or worse, voluntary social immobility

Why is this often hard for newbie gigworkers to understand? Because we share (especially early on in our careers) many of the practical problems that the most disempowered parts of the laboring economy face: precarity, periods where our income can be worse than minimum wage, health insurance risks, and little to no social safety net protections unless we pay full-retail prices out of pocket.

But these similarities do not make us part of labor.

High Agency, Low Capital

Though we share some of the problems (and have some of our own, such as a regulatory environment hostile to small/micro business structures), we don’t suffer from the same agency limitations in addressing them.

A graphic designer or independent strategy consultant is fundamentally a more mobile type of economic actor than a welder or an auto-assembly specialist. We work with our own cheap tools: laptops and notebooks for the most part, rather than with million dollar machine tools or billion dollar factories owned by investors seeking returns. We serve broad rather than narrow patterns of demand.

In the US for instance, a machinist with specialized training in operating a $20 million piece of equipment only used by big airplane manufacturers can pretty much only work within the Boeing or Lockheed ecosystems. A graphic designer not only has a lot more options, but owns her $2000 set of tools outright. A crane operator can only seek work in large industrial settings operating million-dollar cranes. A Lyft driver can work with his own $25,000 Prius.

It’s not that the incentives favoring traditional patterns of collective action in pursuit of political ends are absent, but they are weak. Too weak to allow for traditional top-down, explicitly organized collective action mechanisms. On the other hand, individual agency is much stronger. Much too strong to make coming together in solidarity with “others like me” an obviously smart thing to do.

Why, because the gig economy, especially the indie consulting corner of it, relies on production capabilities that are 5% based on owned capital equipment, and 95% based on affordances of the free internet.

The leverage of what little capital we own, thanks to the internet, is enormous. Bring your own device (BYOD), get your factory for free.

So yes, to a 1910s union firebrand, we are no better than traitorous scabs.

But from the perspective of a 2019 digital economy, we are members of the clutch class, who largely own our means of production, and have too high degree of agency in shaping our own lives to be part of labor, and too little wealth to be part of capital.

We are in the high-agency/low-capital quadrant of the economy (low agency/low capital is labor, high agency/high capital is capitalist class, low agency/high capital is groups like retirees).

This makes it worth our while to basically cut our own deals with whoever we can, whenever we can. Our interests do not generally align with any group that is cohesive enough, and constrained enough in choice of counterparties, that we are likely to wholeheartedly make common cause with traditional labor.

Incentives, Not Mechanisms

For a long time, I myself was confused about this. I thought there was a meaningful free agency collective-action mechanism design problem to be solved. I did not recognize that there was a fundamental misalignment of incentives all around, limiting the desirability of traditional collective action mechanisms and outcomes for us gig workers.

Though I’ve never been personally in a dire enough situation financially to have to resort to political actions, I’ve always felt a sympathy towards those who seem to often be in such dire straits. I used to think: maybe the rag-tag subculture of graphic designers needs a mechanism like the Screen Actors Guild (SAG) to work towards shared interests.

That was a flawed take. The rare corners of the gig economy where organizing like traditional labor is meaningful — actors are a good example — typically exist where the demand is concentrated enough that it can be targeted by collective action. And Hollywood has, until recently, been a very concentrated sort of industry. Now of course, that political balance of power between big movie studios and the talent market is shifting, thanks to the proliferation of cheap tools for moviemaking. Weird dynamics are being triggered too, perhaps as a result of the changing equilibrium (for example, the screenwriters guild recently initiated collective action against the agencies representing them, which is really weird).

With the right talents, you can make an excellent video with an iPhone, upload it on YouTube, raise money on Kickstarter, and make an indie movie on your own with rented equipment and non-SAG type actors. The value of various high-leverage distribution channels like movie theaters is falling by the day. From the point of view of traditionally organized gig-labor in Hollywood, I bet this sort of development comes across as a growing scab-like threat to their position. As yet, the threat is not serious, because the big streaming services do need the kind of high quality content that only Hollywood can currently supply. But that will change, and even Hollywood will be turn into collective action badlands (as an aside, it is weird that 20 years ago, when people first started talking about free agency, the “Hollywood Model” was often held up as an aspirational ideal; today it is becoming clear that it is an obsolete model to leave behind).

As a thought experiment, consider the challenge of actually unionizing in some Union 2.0 form, around whatever it is you do in the gig economy, and think it through a bit. You should get to reductio ad absurdum in a few steps.

Take me. As a strategy consultant who works with senior leaders, the very idea of joining up with fellow strategy consultants to form an Independent Strategy Consultants Guild, and trying to establish a defensible collective bargaining position relative to our shared client base — the tens of thousands of senior (typically VP+) executives in the world — sounds so silly, it looks like a bizarro parallel universe. If by some absurd miracle, such a mechanism came together, your best move would be to scab the hell out of it.

Something about the absurd picture of an ISCG guild president bargaining with a committee of execs in search of consultants just does not compute. Even the basic categories like president and committee are wrong. This is a not-even-wrong view of how at least this corner of the gig economy works.

And something similar is true of almost every sector where a lot of work is organized via the gig economy, one individual contract at a time, one 1099 at a time.

We are not labor. We are not capital. We are clutch.

We are clutch. We don’t waste time in bad equilibria, we either individually help drive discontinuous movements towards better ones, or we leave the scene for a better one.

We are clutch. We do not waste time on collective action political mechanisms. We let individual instincts guide us, and rely on emergent networked dynamics and the power of exit rather than voice to drive political change favorable to us.

We are clutch. We do not try to directly compete with capital by accumulating enough of it to be a player on that side. Most of us have lifestyle business goals — make enough to have a good life, but don’t kill yourself trying to become a multi-millionaire.

Mechanisms do matter, but the ones that we actually employ towards political ends are adapted to our political ends, not those of either capital or labor. The medium is the message.

For capital, the right mechanisms are based on catalyzing favorable regulations and market mechanisms for capital to seek the highest returns. The message of the medium is growth and acceleration. That’s right for them.

For labor, the right mechanisms are collective action based. The message of the medium is stability and security. That’s right for them.

For us in the clutch class, with our Slightly Scabby Tendencies, the mechanisms for working towards shared goals are much newer — loose, intelligent coordination around information advantages. We swap notes, we share leads, we pitch in to help each other out on specific gigs, we put ourselves in crucible groups to rapidly learn skills far faster than labor or capital, we serve as market makers in an economy of referrals, we do what needs to be done. And we do an end run around the stale battles of the 20th century.

The message of our medium is discontinuous change and maneuvering. Not growth for the sake of growth like capitalists, or stability for the sake of stability like labor.

And generally, we are hired by people aligned with the capital class, interested in driving discontinuous change, not by people aligned with the labor class (though there are gig economy cottage industries that are labor-aligned and active in certain highly regulated sectors like education and healthcare).

That’s what makes us scab-like. Whether or not you like that perception.

It’s a tough, harsh message for many, since the gig economy is full of people with strongly socialist economic sensibilities, deeply compassionate natures, and values based on solidarity, equality, and social justice, just like the labor class.

We do not like to think of our actions as perhaps betraying those values as embodied by certain older political forms. But I think we are true to those values in deeper, vastly more effective ways.

So push come to shove, where we stand depends on where we sit.

And in almost all cases, we sit right next to management and capital, serving as clutch players, helping shift gears where necessary, helping with surge actions, helping break out of stalemates.

And where we sit makes us scabs. The burden of that perception is something we have to accept. You’re not going to convince a traditional leftie otherwise.

Clutch Time

Let me end on a lighter note (too late you say? well maybe).

Labor Day is meant to commemorate the achievements and spotlight the political mission and values of the labor class. Those achievements, that mission, and those values are important, and matter. They should be spotlighted. More power to them. Happy Labor Day to them.

There is no Capital Day because you could argue that every 9-5 business day is Capital Day, and every big shopping holiday is Mega Capital Day. The mission and values of the capital class are also important, and matter, and should be spotlighted. More power to them. Happy Every Business Day and Happy Black Friday to them.

Is there a Clutch Day? A day for us in the clutch class to celebrate ourselves?

No, that sort of identity-centric performative class consciousness is for 20th century types.

The clutch class owns a dark slice of lived time rather than a day on the calendar. Clutch Time is evenings and weekends. With apologies to Chris Dixon, what the clutch class does on evenings and weekends, everybody will be doing in ten years.

Clutch time is when capital and labor both try to rest and relax, and gig workers get going. That’s the time when those of us in the clutch class really come into our own. We go to meetups, we get coffee with each other. We scan the social streams for openings, seek out room to maneuver, ways to deploy high-leverage cheap assets, learn break-out skills, dream up hacks and arbitrages. And we sneak one-at-a-time through gaps in the economy rather than marching rank-and-file in slogan-chanting cohorts.

We flow like water, shaping the landscape even as we get around it.

Generally making the stuffy old class hierarchy of the industrial age leak like hell, as we flow invisibly through the interstices, getting inside the OODA loop of the global economy.

Causing the world to shift gears.

We are not capital.

We are not labor.

We are clutch. And the future belongs to us 😎.

<< The Shtickbox Affair | Into the Yakverse index | And So It Begins >>

Let’s talk about an important element of a life of gigwork: the deliverable. Just as T. S. Eliot’s J. Alfred Prufrock measured out his life in coffee spoons, we gig workers measure out our life in deliverables. Almost everything of importance in a gig can be inferred from just two pieces of data: the medium of delivery, and the compensation structure.

Why? Because of what I call the fundamental principle of gigwork: The Medium is the Client.

Don’t believe me? Neither did Agent Lestrode of the FBI’s G-Crimes division (whom we first met in The Two Shadows of the Hero) until I applied the principle to help him find a murderer.

It all began when Lestrode and his senior partner, Agent Jane Jopp, invited themselves over one evening to get my advice on a case and drink my bourbon.

“So, how can I help Gig Crimes this fine evening?” I asked.

Jopp said, “It’s a pure armchair analysis case full of mediocre, inconclusive evidence that points nowhere. Lestrode is taking the lead on this one, so I’ll let him explain, but it’s exactly your speed. I’m just here to listen and drink some of your fine bourbon.”

I handed them their drinks. Lestrode settled into the armchair with a satisfied smirk.

“So, Rao, you know how you’re always saying the medium is the client? Here’s your chance to prove it.”

“I’ll be glad to try,” I said politely.

“It’s a very clean, cut-and-dried homicide, and we have absolutely no idea how to crack it. Practically a locked-library whodunit, except it was a small office building. Victim was the CEO of a medium-sized fine chemicals company, Thomas Turtleneck. Public company, but not worth much. Stock’s been in decline for years, and they’ve shrunk gradually through divestments. Would probably have ended up delisted if they’d continued on this course.”

“I get the picture, I’ve worked with companies like that.”

“Turtleneck was working alone in the building on a Saturday. No other employees badged in that day, but he had four consultants come in for meetings in the morning. Back-to-back.”

“Alone, but with consultants. That’s the loneliness of leadership I suppose. Sounds like some high-urgency critical business engineering was going on.”

“I’ll get to that. All of them had badged in and out by lunchtime. Nobody else entered the building after 1 PM, and Turtleneck did not leave either. The janitor found him at midnight, dead on the floor of his office. Body was still warm. He’d been dead less than a couple of hours. Cyanide in his bourbon.”

“And I presume, since G-Crimes is on the case, that the only suspects are the four consultants?”

“Yes. All four had the means and the opportunity. The cyanide was from the small testing lab right next to the offices. And we have surveillance footage of him drinking from the same bottle late Friday night, working alone. Apparently drinking alone and working late was widely known to be a habit of his. So the cyanide had to have been introduced sometime on Saturday.”

“What about the employees? And the janitor?”

“No sign of breaking and entering, no other badges in the log. The janitor alibied out.”

“And suicide ruled out, I assume? What was he doing in the office alone on a Saturday anyway?”

“Yes, no chance of suicide. He was working on swinging the biggest deal of his tenure as CEO, and as far as we can tell, it was in the bag. He was working on taking the firm private. Was in talks with a private equity outfit, and was planning on aggressive cost controls and layoffs on the one hand, and a couple of pretty bold new growth initiatives on the other. Big two-pronged turnaround play.”

I closed my eyes and thought for a while. Four consultants, one critical transition period for a company, one dead CEO.

Who wanted him dead, and why?

“So who were these consultants and what were they doing with your vic on a Saturday?”

Four Deliverables and a Corpse

“At 8:00 AM he met with Moe Dell. Quant and financial modeling guy. They went over an Excel financial planning model for two hours. Reviewed various final tweaks Turtleneck had asked for. Dell says Turtleneck basically signed off on the work, and he left around 10. His gig would have ended next week once the deal with the PE firm was signed. The model was for the COO of the PE holding company. Once the deal was done, the plan was to use it for quarterly reporting, tracking progress against targets, and calculating stock incentives.”

“Would Dell have been maintaining the model?”

“No, he was set to receive the last 25% of the payment due to him upon delivery of the final model. In fact, he sent the final model with the last couple of changes, along with his final invoice, later that Saturday. Just a couple of hours after their meeting. As far as he knew, he was done. At least judging by his final email to Turtleneck.”

“Did they have a good relationship?”

“He didn’t have much of a reaction to the news. Just stoic professional regrets etc. Samurai-ronin type. Seemed philosophical about probably having trouble getting his last invoice paid.”

“Alright, who was next?”

“10 to 11:30, Turtleneck met with Penny Pilot, an M&A deal consultant specializing in the fine chemicals industry. They went over the final paperwork on the deal. She’s been supporting him on diligence and working with him and his lawyers for months on the valuation and deal terms.”

“What’s her stake?”

“She was billing by the day. At a pretty sweet rate too: $12,000 a day. But that was pocket change compared to what she was angling for. They’d been talking about her coming onboard in some capacity after the deal, with stock participation. Potentially worth millions. She was actually the one who brokered the initial conversation. She’d worked with both Turtleneck and the PE firm before. One of those industry insiders who floats around making deals happen. Mostly works for cash, occasionally takes a piece of the action too.”

“And her reaction to the news?”

“Seemed pretty upset. This was a big deal for her it seems. Said she’d been 50% focused on it for weeks, and that she’d been rearranging her commitments to spend 100% on this after it went through, probably with a VP-level title. She claimed there was probably no hope of salvaging the deal with Turtleneck dead, but that she’d be trying.”

“Alright, Consultant number 3?”

“Peter Pitchman. They just met for half an hour. Design and web guy. He was doing a quick redesign of the website, integrating it with the PE firm’s website, cutting in a new logo, packaging a downloadable press kit about the deal, that sort of thing. A sort of jack of all trades, working off an evolving backlog of direct requests. Turtleneck apparently liked to get very hands on with public-facing stuff, and he needed an outside guy for this since he didn’t want word to get out internally or with their regular PR firm. He was apparently planning to move really fast once the deal was announced. He was getting his ducks in a row for a proper fait accompli.”

“Yeah, most CEOs would leave that to a middle manager under normal circumstances. How was Pitchman getting paid?”

“Turtleneck farmed the job out personally on some design marketplace. Pitchman bid and won. It was $25,000 for the whole job. Half up front, half after final delivery. Said it had been his main gig for the last few months.”

“And his reaction?”

“Seemed a bit sullen about it, and whined about how it would be hard to get the back half of his payment, and how was he expected to pay his subcontractors in the meantime.”

“Alright, final suspect.”

“That was a lunch meeting. Noon to one. Jorge Quadranto. They ordered Chinese. Your kind of guy apparently. Strategy, sparring, and 2x2s. Chats with executive clients, sends notes after. He said they had a general conversation about how the deal was shaping up, and plans for how to move fast and outmaneuver internal opposition after it was unveiled. Put things in motion before people had too much time to think.”

“Sounds like my kind of guy alright. So hourly I imagine? How did he react?”

“Yeah, higher-end guy than you though, $1500/hour. Don’t know if he was faking it, but he was the only one who actually seemed sad about the vic. Said he would miss him.”

Four Media, Four Messages

I sat back, closed my eyes and reflected. The how and where were clear. Means and opportunity available to all four. It was down to motive. And each of them could have had a motive. Who and why?

On paper, all four stood to possibly lose money with Turtleneck dead. Contracted money in the case of Dell and Pitchman. Informal but specific expectations in the case of Pilot. Generalized expectations of indefinitely continued billings in the case of Quadranto.

So if money was the motive, it wasn’t in any obvious way.

I mentally reviewed the four suspects.

Moe Dell. Delivering a financial engineering Excel model. Fixed-price job. Focused, bounded expertise. Principal-agent situation with moral hazard. Professional poise. Wasn’t upset. Did he perhaps detect a fatal flaw in the model at the last minute that couldn’t be fixed, would cast doubt on the whole deal, and would eventually be discovered and ruin his reputation if the deal went through? Would he be held liable? Was he insured?

Penny Pilot. Broker, bagwoman, wheeler-dealer. Paid the most, with the most riding on successful outcome of the four. Statistically, I reflected, most delicate deals of this sort flounder somewhere along the way. Did Turtleneck begin second-guessing key parts of the deal structure? Or did he perhaps attempt to walk back verbal commitments to her? Maybe she saw a way to get him out of the way and salvage the deal with herself cast as more than a broker? Was she trying a spot of king-making with a replacement more aligned with her own ambitions? Become queen herself?

Peter Pitchman. Design and media jack-of-all-trades. Won the job with a bid on an open marketplace. Did he perhaps bid too low on a poorly scoped RFQ? Bite off more than he could chew? Was Turtleneck demanding endless revisions and holding back the final payment? Being an asshole with Steve Jobs pretensions and annoying opinions on fonts?

Jorge Quadranto. Sparring partner. Alternately angel and devil on shoulder, whispering in ear. Coffee, concepts and conversations, with deliverables limited to emails. A discreet, slightly snobby, lofty relationship above the merely transactional. Not much complexity on the surface, but the most likely to be complicit in illicit backroom self-dealing plans. Was there any sociopathic slightly evil funny business going on in the background? Was there more in the deal for him that he let on? Did the nearly spiritual tenor of the relationship mask something nastier?

Each saw the victim through a different lens.

Dell saw him through the lens of an Excel spreadsheet. An inexpert source of feature requests. Somebody to be coached and educated where necessary, indulged and accommodated where possible. And perhaps fooled with hidden cut corners and sloppiness where easy?

Pilot saw him through the lens of a pile of intricate paperwork and deal structure terms. A source of preferences and opinions to be cast into a codified form. Human desires and ambitions refracted through a set of clauses. An incentives equation that couldn’t be balanced perhaps?

Pitchman saw him through the lens of a website. A source of annoying opinions about logo colors, copyedits, and change requests. A perpetual beta website? An endlessly demanding problem client who could never be satisfied, nor easily fired?

Quadranto was like me. Saw the client through the lens of live, candid conversations on the one hand, and email notes on the other. Very simple. Too simple for complicated shenanigans, but with deep trust, a lot of room for subtler forms of malice. A game of thrones backstabbing to advance the fortunes of another tribe?

Four media, four views of a life, one death.

Excel spreadsheet, structured deal document, website, conversations and email notes. One corpse.

Who saw a picture they did not like? Who saw a frustrating problem to be eliminated?

Who was working through a medium whose message was death?

Somewhere in this picture, something didn’t quite fit.

And then I saw it. One of the four patterns popped.

Media as Relationship Distortions

I opened my eyes and looked at Lestrode.

“I can think of a case against each of them, but no real way to test any of them directly. I’ll skip the big reveal: if I had to bet, I’d bet it was Pitchman.”

Lestrode and Jopp both looked surprised.

Jopp said, “I had my eye on Penny Pilot. She’s a shifty one. Was a little too eager to convince us the deal was dead now. And she was the only one with a stake worth killing for.”

“Ah, a common mistake. A thousand dollars can matter more to one person than a million to another. Any stake is worth killing for under the right circumstances. Sometimes even no stake.”

Lestrode said, “I’m thinking Moe Dell. Probably trying to cover up something in that model. Afraid he’d get found out and discredited. Given the amount of statistics and modeling fraud we see in this business, my priors suggest always suspect the statistician.”

“Well,” I said, “I’m glad none of us thinks my guy Quadranto is the most likely. The harmless philosopher confidante. The barking dog who does not bite. The sparring consultant who does not kill.”

Jopp grinned mischievously “In a classic mystery that would automatically make him the least suspected and therefore the killer.”

“Well, here he is least suspected for a reason. He was delivering through the simplest medium. Conversations and email. The simpler the medium, the truer the picture of the client that emerges through it, and the clearer the relationship. If it endures at all, chances are, there aren’t things worth killing for within.”

“Is that your medium is the client principle?”

“A part of it, yes. The more complex the delivery medium, the more distorted the mental model of the client seen through it. The more distorted the view, the more ways things can go wrong.”

Jopp said, “So I see how you’re reasoning here. So in order of complexity, website > spreadsheet > deal documents > conversations/emails? So your heuristic is to basically suspect the person delivering through the most complicated medium?”

“Roughly yes, though I’d put deal documents ahead of spreadsheets. They are a messier medium, with a weaker principal-agent gradient to them. And most executives have a pretty firm grasp of deal terms, so they can really get into it and challenge experts. It’s like sparring, but in a funhouse-mirrors maze.”

Lestrode didn’t seem happy. “That’s a Butler-did-it level principle. Hardly conclusive.”

I sighed. Sometimes real life is not as much fun as detective fiction.

“Think of it this way. Complex media make for entangled, illegible, mutual expectations. Illegible, entangled, mutual expectations favor direct paycheck employment over gigwork. So the closer a gig is to should-be-a-job, the messier it is, and the more successful outcomes depend on long-term trust and broad good faith.”

“Still, no clues? Just cutting straight to a suspect? No dead giveaway insight about Clause 33a that unequivocally tags one of the four?”

I said, “I wish I could give you a clear and surprising Aha! resolution, but this case is more consulting puzzle than murder mystery. You can’t just eliminate the impossible and settle on the improbable. It’s all improbably to varying degrees.

“When you fail to eliminate anything, everything remains, however probable or improbable, and could turn out to be the truth,” quipped Jopp.

“Precisely. Sherlock Holmes would hate actual consulting, though he called himself a consulting detective. The murder part is easy but unhelpful here. And for the consulting part, often, all you have to work with are butler did it level heuristics and priors. Play long enough, and you’re right more often than you’re wrong, and you start to win, net. Am I certain it’s Pitchman? No. Do I think there’s a better than 25% chance he did it? Yes. That’s the best I can give you.”

“So, you’re basically pattern matching here. Website designers more likely to turn to evil than noble philosophers like yourself.”

“Yes and no. It’s more than simple stereotyping. It is stereotypes plus situations. There is just a suggestive situational pattern of psychological circumstances around each suspect here, and when you’ve seen a lot of circumstances, the bad patterns start to pop. You can sort of tell which circumstances are most likely to be frustrating. Perhaps even frustrating enough to make you kill. Medium is the client is one explicit codification of such intuitions.”

“So what’s the suggestive situational pattern here, ye whose kind is without sin?”

“He bid competitively for the job in a marketplace, so there’s a chance he underbid to win the job because he needed the money. There’s a strong chance Turtleneck didn’t quite know what he was looking for, otherwise he’d have sourced the job in a better way. Pitchman was most likely to have found himself in an overpromise/underdeliver situation working against underspecified, ill-posed expectations, given the complexity of defining something like a website upfront. He found himself working directly with a fussy CEO rather than the sort of apathetic middle manager who is more often the client in such gigs. An impedance mismatch. Was he doing more work than he wanted to? Did he want to get paid more? Did he wish he was working on an hourly model instead?”

“Doesn’t all that apply to the Excel guy too?”

“Yes, but in a weaker way. Excel is more a clean medium of unquestioned expertise. People tend not to second guess the details as much. The client might want a particular graph, or an extra column, but they’re not going to challenge the modeling strategy overall. Website design on the other hand, is one of those things everybody thinks they understand. And website designers are among the most frustrated kinds of gig workers I’ve ever met. So yes. Priors. Sadly, I have a nasty, suspicious, presumptuous mind.”

Jopp sighed and stood up, “Well, we don’t have any leads, and no material or circumstantial evidence to go on, so unless we get lucky, we’re never going to know. I guess your guess is as good as ours.”

“I wouldn’t say that,” I said. “Consulting is a long game, and gigs continue to play out long after the last invoice has been paid. Keep an eye on them. See what they get up to next. Check if Pilot drives the deal through without Turtleneck and what role she carves out for herself. Get another expert to audit Dell’s model and check if it was really as done as he says it was, and whether there were any fatal flaws. Watch Pitchman to see if he changes his bidding pattern on jobs. Talk to their friends about how they’re doing. And don’t ignore Quadranto entirely. See if there was more to the relationship than just conversations and emails.”

Six months later, I got a brief email from Lestrode.

You were right. Pitchman confessed while out drinking with a friend, who reported it. They were complaining to each other about bad gigs, and I guess he couldn’t keep it in.

<< The Shtickbox Affair | Into the Yakverse index |

I recently read a line in Terry Pratchett’s Hogfather (the Discworld novels are excellent reading for consultants of all types by the way) that made me laugh out loud because it precisely nails the important intrinsic difference between consultants and contractors. The situation is that a high-profile member of the Guild of Assassins is talking to a bunch of contract muscle types for a job, and one of the contractors uses the word “employed” to refer to the team’s relationship to the client.

He bridled at this. Assassins were never employed. They were engaged or retained or commissioned, but never employed. Only servants were employed.

This nuance becomes evident in a lot of little and big ways but the clearest sign is that as an indie consultant, you almost never haggle over your price. It doesn’t matter what title you give yourself, what expertise you offer, or how much you charge. If you end up haggling, you’re a contractor, not a consultant.

This is a social distinction, not a financial one, and it matters because it sets the tone of your working life. Many contractors make way more money than consultants, and might bill at much higher rates. But an $800/hour gig worker who gets bargained down to $600 in an explicit negotiation, with talk of guaranteed hours and such, is a contractor. A $150/hour gig worker who always gets either a yes or no, but no haggling counter-offers, is likely a true consultant (non-haggling is necessary but not sufficient).

What difference does this distinction make? A big one. Consultants have quasi-social relationships with clients, with non-financial aspects you may or may not value. In fact there are three zones here:

1. Transactional: you haggle, but you don’t expect more than civil social interactions around the gig. Chatting outside the scope of the transactional relationship will feel like voyeuristic curiosity about a different social milieu to both sides.

2. Quasi-social: you don’t haggle, and you become at least mild friends, who enjoy chatting outside the scope of the engagement around shared interests that are “socially native” for both of you in your respective milieus. You probably participate in the occasional unbilled social interaction like a dinner party where you don’t talk shop. But you probably don’t get angry or fight.

3. Intimate: the relationship is close enough for yelling and screaming, and talking about money the way families do internally. Money matters are on the table and up for discussion, but not in the same way as it is when haggling with a vendor in a marketplace. Disagreement is unlikely to end in walking away from each other (truly intimate relationships are rare in gig work, though mildly intimate ones are common).

If you’ve successfully positioned yourself as a consultant, you’re in the quasi-social zone, and people will either say yes or no to the price you quote. If nobody ever says no, you’ve priced your services too low.

Or they’ll judge your sense of your own worth accurately themselves, and make you an offer that works for you, and you can simply say yes. If anyone ever makes an offer that simply feels insulting to you, you’ve either overestimated your worth or badly miscommunicated your capabilities. People rarely knowingly lowball you unless they are assholes and know you are under some kind of pressure that might lead you to give them a bargain deal. If on the other hand, their offer is shockingly higher than you expect, something weird is going on that you should figure out. Check to see that you’re not accidentally working for the mob, as happened to Tom Cruise in The Firm.

You still have to occasionally recalibrate and reset your price as you gain experience and build a track record, and the occasional larger-scope anchor gig will need more custom pricing design, but in general, as a consultant, you don’t haggle in individual transactions.

Why this dynamic? Because consulting is an intellectual partnership that is too bespoke to easily compare to substitutes, and only works if both parties see each other as fully human, and the relationship a bit above pricing discussions. If a client sees you as a functional and sharply scope-limited cog producing a “deliverable” component of a larger activity, that’s a contracting relationship.

In consulting, all parties are contributing to the outcome in highly entangled ways that make it hard to break out and accurately value a given individual’s contribution. In contracting, the contractor typically has clear measures for their own success or failure, independent from the overall success or failure of a project, and a way to value their piece of the puzzle.

When a client truly sees you as a consultant, the choice they are making is not between you and someone else similar to you. Their choice is between doing it one way with you in the picture, and doing it a different way without you. It’s like a marriage: the client is choosing between different lives, not different people plugged into the same slot in a life template that doesn’t change.

This is why that old joke about a man hiring a prostitute works.

Man: will you sleep with me for $1 million?
Woman: Okay
Man: will you sleep with me for $5?
Woman: WHAT! What kind of woman do you take me for?
Man: we’ve already established what kind of woman you are. Now we’re just haggling over the price.

If you’re interested in a more general understanding of the socioeconomic dynamics at work here, read my old ribbonfarm posts The Economics of Pricelessness and Bargaining With Your Right Brain.

Approach pricing your services as a consultant the way you might approach making a restaurant suggestion you might make if someone offers to buy you dinner.

You will make a suggestion that is acceptable to both of you socially, because the main point is to spend time together, not maximize the dollar or calorific value of the food you can get out of it. If you can’t think of a restaurant where you can both feel comfortable and able to focus on each other’s company over the food, you’re not going to be socializing at all.

Think of how awkward a restaurant outing would be if you suggested a super-pricey place you would never pay to go to yourself, and ordered the most expensive things possible, like it’s your one chance to be in that environment. Or if you suggested an all-you-can-eat buffet and gorged yourself like you hadn’t eaten in a week.

Neither is conducive to actually having a fruitful relationship with the person paying. In one case your host would be giving you a tour of a social class out of your reach while graciously ignoring your gaucherie, and in the other case they’d be feeding you because you’re starving and only pretending to keep you company socially.

Do not assume though, that simply because there is no haggling, the price agreed upon is irrational or somehow divorced from demand-and-supply dynamics.

Generally what’s going on, when a gig lands in the consulting zone, is that the value in play is so high that whatever the consultant is being paid is almost a rounding error relative to the value of a potentially successful outcome.

In most gigs I’ve taken on, I’d estimate that my billings represent less than 0.5% of the economic value in play. Usually much less, in the case of large companies navigating really big decisions and problems. That doesn’t mean I’m personally on the hook for delivering 0.5% of the value. Things are generally too entangled to make such determinations. All it means is that my cost fraction is low enough that it’s not worth optimizing. For cost management, there are other, bigger levers around to work with than nickel-and-diming me.

Or for personal gigs with a life-coaching or therapeutic tone, the value in play is their health, happiness, or sanity, all of which are generally priceless to anyone no matter how rich. Which means if they can pay at all, they’re not going to argue about the price. They’re not in that headspace (which means it is even more crucial for you to be careful not to exploit that trust).

Make sure you actually want such ambiguous quasi-social relationships around high-stakes personal or organizational activities, by the way, and are not just defaulting into this mode in trying to avoid the awkwardness of bargaining where bargaining is in fact both possible and called for.

If so, it may be better to position yourself as a contractor, and develop a structured bargaining approach if it fits your goals better. It’s one thing to recognize and adapt to the social narrative surrounding a gig, quite another to become attached to it at the cost of your financial health.

If you are avoiding negotiating simply because you find it demeaning or stressful, you’re doing it wrong.

But if you do like the quasi-social nature of consulting, and you successfully position yourself as a consultant, then price yourself right for it to be a sustainable lifestyle, and try to get to yes/no via 1-step negotiations, with pricing resets every year or two.

I tweet a daily consulting tip on the @artofgig twitter account and compile them every couple of weeks here as a newsletter issue.

Here are tips 45-59.

Consulting Tip #45: Incorporate in the lowest-overhead way possible according to the laws of your country. In the United States, a single-member LLC is generally the appropriate vehicle.

Consulting Tip #46: Even if you’re making very little money right now, keep your business and personal finances separate by opening a business bank account and credit card. It will make book-keeping and taxes vastly easier.

Consulting Tip #47: Give yourself a regular (preferably informal) “paycheck” via automated transfers from business to personal bank, but give yourself permission to modify amount/timing as needed. Best way to maintain a sense of cash flow predictability without being bound by it.

Consulting Tip #48: Hire a professional book-keeper the moment you can afford to. Not only will it take a chore off your hands, it will force you to learn minimum viable financial discipline in a way a janky spreadsheet and a shoebox of receipts won’t.

Consulting Tip #49: Resist the urge to define what you’re doing in general terms or come up with a clear elevator pitch too early. Wait till you’ve actually billed about 100 hours across at least 3 clients to take stock, otherwise you’re theorizing your business in a vacuum

Consulting Tip #50: Try and define what you do via negativa, by identifying things you won’t do (or would rather not do except under significant financial pressure). Job descriptions are for employees.

Consulting Tip #51: Keep products — workshops, keynotes, training offerings — separate from, and subordinate to, your consulting work proper: customized, personalized, bespoke services. If they start driving the action, you are a startup entrepreneur rather than a consultant.

Consulting Tip #52: Avoid the trappings of full-featured corporations — office, mission statement, admin staff — unless you plan to scale from indie consulting to a partnership firm. For solopreneurs, if it’s not billable, it’s almost certainly low-leverage vanity overhead.

Consulting Tip #53: Partnerships are demanding relationships and fail more often than they succeed. Test any potential partner through a subcontracting relationship or small collaboration before committing to deeper/longer-term arrangements.

Consulting Tip #54: Figure out what tribe within a client company you’re working for. It may not map to the org chart in obvious ways. There’s usually at least 2 or 3 in a typical organization jockeying for relative power, and in some state between peace and war with each other.

Consulting Tip #55: Pay your own subcontractors as promptly as you can. Right after receiving their invoices if possible. Nothing breeds goodwill and trust like helping address other people’s cash flow precarity when you can. Don’t be like BigCos, paying as late as possible.

Consulting Tip #56: Keep your awareness of your own knowledge /ignorance up-to-date. If it’s been more than a few years since you last worked on a type of problem, assume your understanding of it is worthless until you can convince yourself it is still good.

Consulting Tip #57: Beware the joyless cashflow grind of leads —> closings —> billings —> referrals/testimonials —> more leads. It feels like 100% of the game when you start, but if it stays that way, you will burn out. You are not an SEO/SEM automation script.

Consulting Tip #58: Reflect periodically on the proportion of your work that comes from following a client across roles/jobs, versus working with whoever is in a given role/job in an organization. Dog consulting vs. cat consulting.

Consulting Tip #59: As an outsider in a client’s world, you will hear a lot of jargon you can’t parse. Pick your battles in asking clarifying questions vs guessing vs ignoring. A consultant who is constantly asking clarifying questions is too annoying to get to be useful.

Here is Compilation #3 (28-44) if you want to backtrack and catch up.

If you’re active on twitter, and want to join the conversation there, follow @artofgig, introduce yourself via a reply to this pinned tweet, and follow some of your fellow subscribers on this list.

<< Maneuvers vs. Melees | Into the Yakverse index | The Shtickbox Affair >>

“Arnie,” I said, “meet my brother, Mycroft Rao, of Diogenes Street.”

Arnie wrinkled his nose, looked around carefully.

“This is a dank back alley with overflowing dumpsters, and that man you’re pointing to is a hobo asleep inside what appears to be a large barrel. Are you trolling me?”

My young friend Arnie Anscombe and I had just walked over from the bar where we’d been chatting about maneuvers versus melees. As you may recall from my account of that chat, our conversation ended with the question of whether there was a fundamental typology of consulting conversations, and I had suggested taking the matter to my older brother Mycroft.

Mycroft opened one eye and glared at Arnie.

“That’s Mister hobo to you, punk.”

He turned to look at me. “Well Junior, haven’t seen you in a while. 2x2s giving you trouble again? Who’s your rude young friend here?”

I sighed. It is hard sometimes, having a genius older brother who insists on living in a barrel behind a dumpster.

“Mycroft, meet my friend Arnie.”

I turned to Arnie, “No, he’s not a hobo. Or at least, not just a hobo. He’s a consultant’s consultant. Never works for clients directly. Believe it or not, he bills out at $25,000 an hour when other consultants call him in.”

Arnie looked at both of us suspiciously. “Yeah right. $25,000 an hour, and he lives in a barrel in a back alley. And he’s a consultant’s consultant, but I’ve never heard of him?”

Mycroft grinned at Arnie. “Two billable hours a year, and I can live more comfortably than you probably do. Three, and I’m saving more for retirement than junior here in his fancy premium mediocre high-rise apartment.”

“So… what, you’re some sort of meta-consultant?”

Mycroft shook his head impatiently, dove back into his barrel, scrounged around, resurfaced with a half-empty bottle of water, took a swig, and glared at Arnie.

Cognitive Infrastructure

“Mycroft prefers the term infraconsultant. Consulting on the cognitive infrastructure of consulting. Bedrock stuff. Operating systems for consultants,” I explained.

“And what infraconsulting do you and your rude young friend here need today, Junior?”

“Well, Arnie and I were just talking about types of conversations you can have with a client. He has been logging all his consulting conversations on a spreadsheet with… what was it?”

“19 objective metrics, and 7 subjective scores,” said Arnie proudly.

“Yeah, that, but he can’t seem to detect any clear patterns, while I…”

“…while you probably tried make up a half-assed 2×2 based on 3 anecdotes, and it didn’t work, huh?”

“It wasn’t that bad. We did figure out why conversations about finance and sales are rare in our kind of consulting: we are about maneuvering, finance and sales are about the melee.”

Mycroft shook his head. “You kids with your data munging and your overthinking. There are only two kinds of consulting conversation, the kind that works, and the kind that doesn’t.”

You have to be patient with Mycroft when he’s playing curmudgeon, and draw him out by piquing his interest. He only lives in a barrel ironically, and the whole “skeezy living, low thinking” pose is just a never-ending long troll of the rest of us.

Arnie opened his mouth to speak, but I gave him a warning glance and shook my head slightly.

Mycroft scowled at Arnie. “So you tried what is it, 19 plus 7, a 27-dimensional bottom-up typology and that didn’t work, big surprise.”

He turned to me, “And you Junior, you tried a 2-dimensional one, and that didn’t work. Another surprise. And you don’t like my one-dimensional typology either. A third surprise. You kids are hard to please.”

“Your one dimension was a rhetorical tautology. Effectively zero dimensions. C’mon Mycroft, cut out the grumbling and give us something useful,” I said. If you let him, he’ll grumble on cynically forever.

Internal Realities, External Realities

“You don’t like my one dimension, so let’s hear yours. If you had to pick just one dimension to classify consulting conversations, what would it be?”

Arnie and I spoke at the same time.

“Internal realities versus external realities,” said Arnie.

“People conversations versus stuff conversations,” I said.

Mycroft nodded approvingly at Arnie.

“That’s good, that’s good. You’d better watch out for Arnie here, Junior. He cuts to the essence quicker than you. People versus stuff is good, but internal versus external is more fundamental. Now, which space of conversations is bigger?”

Arnie frowned, and said, “Is that a trick question? External obviously. The world is bigger than the inside of any single organization.”

Mycroft grinned and looked at me.

I shrugged. When Mycroft throws an obvious trick question at you, you play along.

“Internal obviously, since you’re asking. Now tell us why.”

“How much time, attention, and energy does a typical client devote to modeling the outside world versus the inside world?”

“Okay, fine, inner reality is bigger if you look at it that way, in information content terms. Half of my clients barely think about the outer realities beyond a few cartoon views.”

“It’s not just raw quantity of content, Junior. Where can you get more easily lost in the infinite depths of eternal priceless bullshit? And where do you hit a brick wall of unknowables quickly?”

“I get it, you’ve made your point; all the bikesheds and shaveable yaks are part of inner realities people have constructed for yourself. So that’s the two kinds of conversations? Big conversations about internal realities that can get arbitrarily detailed, small conversations about external realities that end where the unknowns begin and action must start?”

Mycroft smiled brightly. “There you go. Good job, boys! Now go away and leave me alone.”

He tried to crawl back into his barrel, but I caught him by the foot and dragged him out again.

“Yeah, we need something better than that. We could have come up with that ourselves.”

“Fine,” said Mycroft grumpily. “Then you pay.” He held out his hand.

Arnie raised a sarcastic eyebrow at me. “What now? You’re going to pay him $25,000? Or do you get a friends and family rate?”

I shook my head. “No, that’s for support on an actual client gig, and no I don’t get a friends and family rate. This is a conversation about consulting, among consultants, so…”

I sighed, pulled out my wallet, took out the one yak coin I keep in there, and handed it to Mycroft, who grinned and pocketed it.

Arnie stared at me. “Is that one of those yak coins you’re always bragging about? You’re just going to give one to him?” (see The Shadow’s Journey and The Two Shadows of the Hero)

“Don’t worry, I’ll get it back from him the next time he wants to venture out of Diogenes Street and drop by my place for a shower and a fresh shirt.”

“That’s true enough,” said Mycroft. “Okay, you know my methods Junior. I’m thinking of a number. Guess.”

I explained for Arnie’s benefit. “Mycroft here practices the purest form of consulting. He never makes up his own models. He only takes your models, refactors them, and gives them back to you.”

“Steal client’s watch, tell ‘em the time. It’s the One True Way. Now what number am I thinking of?” said Mycroft.

Mapping Conversation Spaces

“Right. So he’s probably thinking of one of my own models. Hmm… let me see, it’s not a 2×2, so my next most favorite construct is a triangle, so I’m going to go with 3. It’s a pick 2 of 3 type triangle.”

Mycroft grinned, reached into his barrel and grabbed a small whiteboard and some colored markers, and drew a large triangle. He’s not entirely averse to using the tools of the trade.

“Almost, but not quite. There’s a 3 in there, and a triangle, but 3 is not the number I’m thinking of. Try again!”

Enlightenment dawned. “Ah, you’re thinking 12. My model from that blog post I wrote about making your own rules. That had an inside/outside scheme to it.

Arnie said, “I remember that. Rather overwrought and thin on the empirical justification I thought. But it was useful, I’ll give you that.”

Mycroft nodded. “Yes, Junior here tends to overdo the runaway platonism, but in that case it worked. That was one of your better models, Junior. I got some very productive thinking done with that. You might make a good infraconsultant yet. In fact, it was good enough that…”

He scrounged around inside his pockets, pulled out the yak coin I had just given him, and handed it back to me.

“…you’ve earned your yak coin back. Now, let’s see if I can recall the details.”

Mycroft closed his eyes briefly, then opened them and scribbled carefully for a few minutes. He has an impressive near-eidetic memory and can remember things I’ve said or written better than I can.

“There.” He said, handing me the whiteboard. “Here’s your conversational typology. Happy? That map is worth more than one yak coin. Worth at least two showers and shirts. Take out your phone and take a picture. I’m going to need that whiteboard back.”

Inevitabilities versus Surprises

Arnie squinted, frowned, and read aloud:

1. Inorganic culture

2. Organic culture

3. Strategies

4. Competencies

5. Business models

6. Organization structure

7. Difficult people

8. Difficult projects

9. Invention gaps

10. Marketing gaps

11. Optics problems

12. Alignment problems

He paused for breath, then continued.

“This is a pretty busy diagram, so let me make sure I’m reading this right. So you’ve got the inside and outside of the triangle. And outside realities are on the inside of the triangle. Well that’s annoying, but I suppose it works. And the market is a black hole at the center.”

“That was a void in Junior’s original model. Clever move, that. Putting the outside on the inside. Annoying but clever. He has his moments.”

“If you say so. Just seems pointlessly idiosyncratic to me. And you have analysts, competitors, and talent serving as three lenses on the market-void? That seems wrong. Shouldn’t customers be at the center?”

“Wrong. The market is the energizing void at the heart of a business, but customers don’t exist except as abstractions you’ve created. Businesses create customers as stable patterns of behavior, as Junior here likes to say. The idea of a customer is part of inner reality. It may or may not reflect the external reality of how the market is actually buying what you sell. It is one of three forcing functions shaping organizational behavior from the inside.”

“Okay, so that’s why customer behaviors is outside one edge of the triangle, and the other two inner realities are employee behaviors and technology dynamics?”

“Correct. All consulting conversations happen at the boundary between inner and outer realities, driven by the three inside-out forcing functions: customer behaviors, employee behaviors, and technology dynamics. The other forcing function is outside-in surprises. That is a good definition of market as it happens: a stream of outside-in surprises.”

“And there are 3 conversation types on the inside of the triangle, relating to market-facing outer realities, and 9 on the outside of the triangle mapping to inner realities? What’s the difference there?”

“What do you think?”

“I’m thinking territory conversations versus map conversations.”

“Correct. But also streams of surprises versus streams of inevitabilities.”

Conversational Tectonics

“What else do you see?” asked Mycroft.

Arnie said, “There’s six kinds of conversations that can happen along the edges, and another six at the corners? What’s the difference? Why are the edge conversations in black and the corner ones in red, green, and blue?”

Mycroft turned to me. “Any guesses, Junior? You came up with the original after all.”

Mycroft has a way of making my own models seem unfamiliar to me. I stared at the drawing.

“Well, uhh.. the six edge conversations… they seem important but not urgent. Inorganic and organic culture…types 1 and 2… I guess 1 is like culture shocks through mergers and acquisitions? Or new employee cohorts, especially leadership ones, versus 2, the native culture? And then you have competencies, which are an internal thing, and strategies, which drive how they play out in the world. That’s 3 and 4, shaped by technology dynamics. And org structure versus business models — stuff you design with org charts on the inside versus models analysts use to interpret the structure from the outside — yeah, I’m going with important but not urgent, which would make the corners urgent but not important maybe?”

“Junior, junior junior…” Mycroft shook his head sadly. “Urgent AND important! As you boys appear to have already discovered, urgent but not important generally means tactical action in sales and finance. Not much room for your kind there. Time constants between weeks to a quarter.”

I kicked myself mentally for not spotting that. “Ah, so urgent AND important conversations happen at the tectonic plate boundaries. And the colors represent the types of urgency. So you’ve got optics and alignment conversations where customer behaviors meets employee behaviors, 11 and 12. You’ve got difficult people/difficult problem conversations where employee behaviors meet technology dynamics, 7 and 8…”

“Those are the inner-reality faultlines, yes. And there are corresponding outer-reality faultlines that can also cause the same corner conversations, but go on.”

Arnie cut in to finish, “… and you get innovation gap conversations and marketing gap conversations where technology dynamics meet customer behaviors, looking inside-out…9 and 10. Or business models colliding with strategies, looking outside-in.”

“INVENTION my boy, INVENTION! Never use the word innovation around me. It’s a word used by bureaucrats to pretend they’re in charge of technology. Invention is fundamental, innovation is bullshit theater!”

Arnie looked like he was about to protest but I silently mouthed NO at him. There are buttons you do not push with Mycroft.

Arnie said, “This is all… suspiciously just-so…And colorful. So you just magically managed to classify conversations into 12 types off the top of your head, and it just happened to fit this triangle framework?”

Conversational Territories

Mycroft turned to Arnie, “You’re a quant type, eh? Neck-deep in eigenvalues and singular values and principal component analysis, eh? I imagine you ran some sort of k-means clustering on your spreadsheet of conversations?”

I grinned, “Watch out, he’s now going to steal your models and tell you the time.”

“Let me ask you, Arnie, why bother with making up frameworks at all? Why bother with clustering data and attaching evocative labels to clusters? Why not just use everyday categories based on functional boundaries? Why not just classify conversations as marketing, sales, engineering, HR, and so forth?”

“Well, complex conversations spill out of superficial boxes pretty quick…”

“What does that tell you about good frameworks?”

“Err… the boxes are better? Conversations spill out of boxes less readily?”

“Exactly, and when they do spill out of a box, if you’ve built the framework well, they will likely flow into a neighboring box rather than just out of the framework altogether, causing a mess.”

“Okay fine, so good frameworks are in some sense, natural. The conform to the contours of conversational flows.”

“They carve reality at the joints,” I chimed in.

“Well, aren’t you kids smart,” said Mycroft. “Now try German-smart.”

Enlightenment dawned on Arnie first. “Ahh, I see, you’re talking about eigenconversations.”

“Wunderbar! Exactly, and depending on the size, scope, and resolution of the framework you build, you’ll end up with a different number of eigenconversations. I just used Junior’s clever 12-rules triangle model for convenience, but others might work as well.”

“Okay, I get it,” I said. “I can see how this typology of 12 conversation types is pretty clean and covers the ground well. But almost no conversation I can recall maps to just one of these.”

“That’s not the point!” said Mycroft sharply. “The point is fast transients in your conversational OODA loop. You don’t want conversations to stay in a box at all. You want them to go where they want go, but track them rapidly. You want to put a map in your head that allows you to plot the course of the conversation…the problem is not that the marketing conversation turned into an org design conversation, but that you didn’t notice and continued treating it like a marketing conversation!”

“…got it, track it to see where it is going, I get it….”

“…and more importantly, where it is not going, but could. Any sufficiently rich conversation will include an element of every possible eigenconversation, and as consultants, it is your job to expand the range of possibilities being explored. If a necessary eigenconversation doesn’t happen spontaneously, you may have to inject it!”

Arnie interrupted, “I can see you two are related. You’ll INTP this to death if I don’t stop you. How about we try an example? How about the Boeing 737 Max case?”

Case Thinking

“I’m INTJ thank you very much. The Boeing case is an excellent choice. A conversation about an acute, systemic crisis should certainly hit every eigenconversation, and also test the framework for obvious gaps. What do we know about what happened? Go!”

“Well, it began with two crashes in a short period and PR crisis…”

“Type 11, an optics problem conversation. People died in the outer reality, but in inner reality, a narrative was threatened, which was triggered an actual reaction.”

“They tried to spin it and blame an outsourcing company, but then it became clear that the core engineering decisions were made within Boeing.”

“Types 1 and 2, inorganic external culture versus organic internal culture. Excellent, that’s 3 of 12 already.”

“Well, then nobody believed them anyway and it looked like they were trying to avoid consequences, and they were faced with order cancellations and fleets being grounded, and the press started digging and uncovered the backstory of competition with Airbus…”

“A marketing gap with Airbus offerings as root cause, Type 10,” I cut in, “that they fixed with a hasty design hack rather than a ground-up redesign — they had to sling bigger engines under the airframe, and then they bolted on that MCAS control system… a sloppy closing of an invention gap to address a marketing gap. Type 9.”

Mycroft beamed at us, “5 eigenconversations of 12, You boys are getting it. But why did Boeing have to half-ass it?”

“We can only speculate, but presumably it was a fundamentally difficult project with impossible trade-offs given the market time pressures. And difficult people were able to drive through bad decisions, because nobody challenged them at key points.”

“7 and 8. Good speculations, though you’d have to talk to Boeing people to verify. But surely as the industry leader, Boeing had the right competencies to tackle difficult projects under competitive pressure? They pretty much invented the industry, and Airbus was late to the party. So why the breakdown?”

“Ah, that would be the competencies conversation, Type 4. Were the engineers good enough? Or had they ceded technology leadership to Airbus engineers?”

“Or could it be that the engineers knew what they were doing, but the competitive posture relied on brute-force sales driving the technology roadmap, rather than a product roadmap driving sales posture?” asked Mycroft?

“Ah that would be the strategy conversation, Type 3!” Arnie cut in.

I looked at the whiteboard, where I’d been keeping track. “So what’s left? What are we missing? Let’s see. We have 5, 6 and 12 left to do if we’re playing bingo here.

“5, business model…” prompted Mycroft.

“They were set up to sell to weakened regulatory agencies like the FAA, and airliner industry executives were probably in bed with regulators in a deeply cronyist, consolidated industry…pilots and passengers were low on the totem pole of stakeholders.”

“6, organization structure…”

“…Clearly there were problems with how planes were sold in Southeast Asia and Africa relative to the developed world. Somewhere, somehow, corners were cut in order to make the sales… necessary technology options were sold as optional… if Boeing can be rescued at all, they’ll probably need reorgs to address that. Maybe a centralized global standards function so regional sales orgs don’t get to mess dangerously with what’s being sold. Reminds me of that Grenell tower fire… that case of fireproof cladding being sold differently in different territories.”

“Good secondary example. And finally, 12, alignment?”

“Somebody somewhere didn’t communicate the safety-critical nature of the technology and training requirements and override capabilities…engineering built one thing, sales sold a different thing, pilots understood a third thing. End result, a bunch of people had to die.”

We stopped to catch our breath and reflect on the inventory.

After a minute, Arnie said, “Wait a minute, we switched gears from using the model to track information about the case at some point, and started looking for data to flesh out parts of the model! That’s confirmation bias! And maybe some overfitting as well!”

“Feature, not bug, my boy!” said Mycroft. “Frameworks are not scientific models. They are meant to do the work of framing. Sometimes you use the phenomenology to lay out the frame, other times, the frame tells you what phenomenology to look for! In consulting, frameworks can be maps that create the territories.”

“That can’t be right. How do we know the framework is exhaustive? How do we know it is not blinding us, and that we’re not missing things?”

“YOU DON’T! You navigate with the model, and when it fails, you look at whether you missed something that despite the framework, in which case you just have to get better at using it, or you missed something because of the framework, in which case you have to…”

“…extend and augment it?”

“NO! That just makes it overwrought and baroque over time! You have to go back and rethink the whole framework again! Back to phenomenology!”

“Rebuild the model, and figure out new eigenconversations if necessary.” I finished.

“There are no fixed truths. Only dead conversations versus live conversations,” said Arnie.

“Conversations that work, and conversations that don’t,” Mycroft finished triumphantly.

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I was dealing with a family medical emergency for much of this week, so this week’s issue is rather grimly inspired by personal life stuff. Naturally, it’s in the form of a 2×2, my own preferred first-responder protocol.

I came up with this while trying to figure out why my response to events this week seemed inadequate even to me, and even by my own mediocre-slacker standards. I concluded that what I deal with poorly is the combination of high risk and high time pressure.

These seemed like good axes for thinking about regimes of indie consulting as well (especially for corporate clients; this week’s issue is not quite as relevant for those of you who work primarily with individuals), so I figured I’d explore the time-pressure vs. risk 2×2. It is a cousin of the well-known important vs. urgent 2×2 (the Eisenhower matrix, popularized by Stephen Covey), but the shifts in variables helped me think more clearly about responses in particular.

Viewed from a time-pressure/risk perspective, the roles of consultants of all types can be understood as participation in non-routine institutional response patterns.

Commonplace and specialized capability shortfalls in generating such responses are generally met via standing B2B relationships with other companies. One company’s consultant is another company’s paycheck employee. This kind of response capability, available as an on-demand service from another large firm or organization that has effectively aggregated enough demand to smooth out variability and sustain a separate corporate existence, is not for us indie consultants.

So where do we indie consultants fit?

We help address capability shortfalls that fall through the cracks between in-house capabilities and systematically outsourceable capabilities.

Indie consultants naturally fit in where the capability gap is either small enough and oddly-shaped enough to be filled by a few individually contracted people OR where the gap is large, but can be filled by a fairly generic type of labor without the help of a labor-aggregating counterparty.

Extra-Institutional Response Patterns

In a previous post, Elements of Consulting Style, I outlined 4 styles based on 4 types of clients. This response regimes 2×2 gives you an alternative set of 4 styles, based on 4 types of situational response you might be helping clients craft.

If you apply both 2x2s to what you do, you’ll likely end up with a very good triangulation of who you are as an indie consultant. I’d be interested to hear where you land, in the comments. Your offering might fall into any of the 16 types induced by the two 2x2s. I for instance offer “Strategy for Explorers”. You might be in “Preventive-Care for Integrators” or “Surge-Capacity for Testers”. Here’s a handy 4×4 table for you to think about. Try classifying the gigs you’ve done or would like to do on it.

Indie consultants help client companies generate responses to events and situations for which they lack an internal capacity, and which they do not understand in a systematic enough way to outsource to another large company (indeed, aggregator service providers may not even exist in sufficiently messy and treacherous capability minefields).

In other words, indie consultants are part of extra-instutional response patterns. That much is obvious.

What is perhaps less obvious is that the lack of systematized capability (either in-house or outsourced) is generally rational. Perhaps the need arises infrequently, or unpredictably. Or perhaps it is a one-and-done deal in the median case, like logo design. Or perhaps there is a glut of supply, making it easy for companies to just hire what they need, when they need it.

Curiously, many struggling consultants seem to believe that the lack of in-house capacity for the services they offer is irrational. That their work ought to be a job, and that they ought to be hired in as an employee to do it. I’ll save analysis of that phenomenon for another day. It leads to weird and potentially crippling mental blocks that put you in the worst of both worlds.

Let’s survey the 4 types of extra-institutional response.

Preventive Care

The low-risk, low time-pressure quadrant is a very crowded (for obvious reasons) and demand-limited market. It is also something of a lemon market: bad actors driving out the good.

It is easy to convince yourself — and certain kinds of gullible clients with more budget than sense — that all sorts of preventive care consulting products and services are necessary. This is the kind of consulting offering (often made up by laid-off mid-career middle managers who have succumbed to up-or-out pressures) that best fits the accusation that consultants are people who help solve problems that wouldn’t exist in the first place without them.

Preventive care is usually a knowledge-based consulting offering, and the main principled question to ask is whether the knowledge is useful or necessary for the client.

If you have to struggle hard to sell the value of the knowledge, and it feels like lecturing someone who may not have teeth to floss regularly, you might want to reflect on how necessary the knowledge you’re hawking is.

You might want to ask yourself honestly what the actual risks and costs of ignoring the knowledge (and you as the bearer of it) are, for the client, and why they seem to be getting along fine without it.

Perhaps your prospective clients are not quite as dumb as you think for turning down your proposal for a two-million-dollar all-hands 12-step Alien Attack Preparedness workshop (box lunch included).

Surge Capacity

The high time-pressure/low-risk quadrant is the commodity quadrant of consulting. If consultants are being hired in job lots, driven largely by predictable or unpredictable demand spikes affecting the client, it is surge capacity. If you feel like part of an “Uber for X” work force hanging around hoping for surge pricing to kick in, you might be in this quadrant.

If you’re in this quadrant, chances are you’ll struggle to brand and position yourself uniquely, and also struggle to set your own price or differentiate yourself from contract labor supplied by contracting companies. One test: you have a blog, portfolio site, or other marketing asset, but most of your work still comes through gig sites like Upwork. You’re unable to actually attract any work at your preferred bill rate, and are forced to work at prevailing market rates.

Note that the “low risk” part is at the individual level. For a company that needs to temporarily double its sales force to exploit a seasonal demand surge, the opportunity costs of missing the big selling window overall may be huge, so in aggregate, the response may be a high-risk one. But retaining a given individual consultant is not a high-risk move, since there are many participating in the response, and any individual consultant is dispensable/easily replaced.

Strategy

This quadrant is generally where I hang out, though I make the occasional foray into the preventive-care quadrant. High risk and low time pressure is generally the combination of conditions that makes anything “strategic”. Things that end up in this quadrant are generally the most thinky types of consulting offerings, but surprisingly (and unlike the preventive care quadrant), are not strongly knowledge or skill based. Instead, they are based on client-consultant fit and trust.

While knowledge of course plays a role in strategy-centric offerings, it is usually based on a rich but illegible track record that induces trust, and idiosyncratic personal mind-melds of taste and intellectual style between client and consultant. Since there are no skills per se, beyond general intelligence, and there is generally enough time to read and research relevant information, knowledge matters less than the ability to connect with the client’s capability shortfall in an effective and trustworthy way.

A good strategy consultant is, in many ways, simply someone who is good at just being present in a situation without becoming yet another part of the problem. This can be surprisingly hard to do (many a time, I’ve watched “strategy” people walk into a messy situation, and pick out, with unerring accuracy, the role to occupy that makes them biggest new piece of the problem).

Sometimes, all I do in a situation is listen and bear witness to whatever is going on, occasionally drawing attention to this or that piece of the puzzle, adding nothing new. I’ve received the most appreciation when I manage to do that well. It’s kinda fun working in a zone where “great, you didn’t make it worse!” is rare enough to be appreciated.

First Response

This is the quadrant that, I learned from this week’s events, I’d probably be bad at. I’d put stuff like security or PR crises there. The combination of high risk and high time pressure imply that it is a zone where there is no time to learn, or even translate knowledge into actions via deliberate analysis. You have to be able to pattern-match and generate appropriate responses much faster.

Not just that, you have to be good at dealing with clients in abnormal states, like patients in ICUs. Their ongoing behavior may be shock or stress driven, and be entirely inappropriate and unskilled. Their regular functioning may be severely compromised by the situation. They may be a big part of their own problem. The situation may involve various other parties who have become involved, like law enforcement, disaster relief, or the media. Deep emotional reserves may be necessary for effectiveness.

I’d like to learn and get better at first-response behaviors, and the art of adding value under significant time pressure. I think one of the reasons I turn to 2x2s so often is that it is genuinely a first-responder triage-style tool, though I don’t often get to use it in first-responder ways. It’s a sort of aspirational thing with me.

First-response consulting is now one of my research interests. If you think you’re in this quadrant, I’d love to hear from you in the comments (and I suspect other readers would too). If you have interesting references to books or blog posts in this quadrant, I’d love to see those as well.