Why Bridges?

1. Why choose a miniscule strategy coaching firm ---

a) instead of a mammoth strategy management consultancy? (As of 2010 the preeminent "Big Three" of McKinsey, Bain and BCG respectively have staffs of ca. 8,700; 4,800; and 2,800.) 

    An obvious, albeit not very good, answer is the assumption that the tiny firm will cost a correspondingly tiny fraction of what a giant consultancy would charge. That can be 100,000€ a week ! The better answer, which applies both to parts (a) and (b) of this question, is below.

b) instead of one of the smaller boutique strategy consultancies?

    These have less aggressive pricing than the "Big Three," but what really count are the results, the price/performance ratio. Furthermore a consulting team and a coach are not necessarily mutually exclusive.¹ In fact, they may well be complementary.

2. Given that a strategy coaching firm is a reasonable choice, why Bridges?

a) the short answer

    "Results based billing" and "one client per industry" make for the best USP in the coaching profession. For the medium length answer (half-a-dozen slides, for those who prefer this approach), click on Bridges PPT.

b) the long answer

Strategic ICE

    Let us consider ICE, which may be used as a strategy acronym, and not just because strategy is a slippery subject, or because of the dangers of moving forward (acquisitions, transitions) on thin ice. One may postulate that strategic ICE consists of the triad:

· Initial        Core             Evaluation   -   (what is our business, where to compete)

· Improved  Competency  Execution   -    (communicating/ implementing strategy)

· Inimitable  Corporate     Excellence   -   (sustainable competitive advantage - the holy grail)

    Ice -- and ICE -- have developed in three stages, each with its own price/performance and experience curves. The first stage was harvesting ice -- and traditional internal strategy formulation by the CEO. The second stage was the ice factory -- and external strategy formulation by management consultancies. The third stage is the home refrigerator -- and the advent of strategy coaching.

Moving Along the Curve versus Competing on a New Curve

Stage I to Stage II

    In the 1880s in the U.S. 25 million tons a year of ice² were "harvested" from frozen lakes and ponds. At about this time, ice machines were becoming cost effective. They had first appeared some 30 years earlier. The then dominant player, Tudor the Ice King, did not embrace the new technology. Rather, he attacked it. (Some biographical notes about this courageous, relentless -- yet forgotten -- entrepreneur appear on the subpage "The Ice King" on the menu at the right.) By 1900 ice harvesting had become irrelevant.³ In fact, no ice harvesters made the transition to ice factories despite their having the customer knowledge and distribution expertise.

Stage II to Stage III

     In 1920 the industry of ice factories ranked 9th in the U.S. in terms of investment. Seven years later the home delivery segment of the business was mortally wounded as home refrigerators began to take off with GE´s Monitor, which sold a million units. By the 1930s the ice factory with an integrated supply chain of ice blockhouses had essentially disappeared. Not one single ice factory company made the transition to manufacturing refrigerators.

    Why? People tend to define their businesses in terms of what they do: "harvest ice," "make ice large scale for households." They were not viewing their businesses in terms of "delivering ice to the customer" in the most efficient possible way.

Strategy ICE:

Stage I to Stage II

    No renowned Fortune 500 CEO switched into creating a strategy management consultancy that became a global firm. 

Stage II to Stage III

    None of the strategy management consultancies is aggressively supplementing the business model of the engagement team with an executive coaching component. Understandably enough, they do not appear likely to enter the mass market for virtual (on-line) strategy services any time soon either.

    Nevertheless, the proper view of the business is "delivering ICE to the client" in the most efficient possible way. A seasoned strategy coach who works on a performance basis can represent very efficient delivery. In many situations adding such a coach to the "strategy mix" appears eminently reasonable. (Similarly, the Internet represents very efficient delivery for strategy services to the mass SMB market. This approach is not, however, consistent with a "one client per industry" commitment.)

c) Summary: why choose the Bridges brand? 

    First, for certain clients the "goodness of fit" will mean that Bridges is arguably the most efficient way to get ICE. Second, a Bridges coach will not deliver ICE to the competition. Third, we believe our USP creates a self-fulfilling prophecy: the chosen coach working with the chosen client dramatically increases the chance of co-achieving significant results.  

Ice versus ICE 

    Let us take a brief historical excursion to conventional ice in the company of its namesake acronym for a closer look at their performance/experience curves.

Stage I: harvesting ice

    The Ice King, Frederic Tudor, was not from medieval England. Rather, he was a 19th century American entrepreneur. He successfully transported ice, "harvested" from New England lakes, to nearby cities and as far away as to Calcutta, India. The competitive advantage that enabled him to dominate the ice industry was logistics. He transported ice more efficiently and had bigger, better, and more ice storage blockhouses than his rivals. The ice would be delivered from the blockhouses by wagon to individual households.

    From the early 1800s to the 1850s and beyond he was still competing on the same technology curve as the Persians in 400 BC. (They brought ice down from the mountains to the blazing hot desert, storing it in large underground vaults (5000 cubic meters) with thick walls made out of a special mortar.) ("ice" Wikipedia, 2010)

Strategic ICE originally reflected the vision of the emperor, emir, explorer-entrepreneur, as conveyed directly or by his emissaries and éminences grises. Similar to frozen water, it moved on the same curve throughout the centuries -- from antiquity into well into the second half of the 1900s. ICE was conceived, developed and delivered internally.

Stage II: ice factories

    The new curve, the paradigm shift in technology, came with the advent of ice factories.⁴ An ice-making machine was first patented in 1834 by Jacob Perkins, an American in London. By 1880 there were machines that could make 18 or 19 tons of ice a day more cheaply than one could harvest it. However this development did not change the delivery system: from ice blockhouse by wagon to the end user. 

Strategic ICE: The equivalent paradigm/production shift in strategy formation came with the advent of the management consultancies. The American predecessor was Arthur D. Little, founded in 1886. However the creation of large strategy ICE factories was really initiated by just three firms: McKinsey & Company, founded 1926; Boston Consulting Group (BCG), founded 1960; and Bain & Company, founded 1973. There are other major firms offering strategy services, some with several thousand consultants in their own right, and myriad smaller firms, many founded by former partners of the Big Three. Nevertheless the Big Three remain dominant in strategy consulting to this day.

ICE is developed by external advisors and delivered to the client (either the corporation or a sbu) with teams. The teams can be massive. The consultancy doing the work will not hesitate to develop and deliver ICE to competing companies.  

Stage III:  the home refrigerator⁵

    Commercial refrigeration units were developed in the second half of the 19th century. They used toxic gases and were too dangerous and bulky to use in homes. Units aimed at households came on the market in the U.S. in 1915. Early home refrigerators were cumbersome with the power unit being located in the basement, and the storage unit in the kitchen.

    Similar to the advent of minicomputers, that the 1915 technological advance would so rapidly lead to a mass market for much smaller units was not immediately evident. In 1922 a home refridgerator in the U.s. cost over $700, at a time when Ford´s Model T automobile cost $450!

    In 1923 Frigidaire introduced the first self-contained unit. In 1927 General Electric (GE) introduced the first popular unit, the Monitor, which still used toxic gases. By the end of the 1930s, prices had fallen dramatically as better and safer refrigerants such as Freon came to the market. Soon over 60% of U.S. households would have a refrigerator. The Stage II household ice delivery business was dead and buried.⁶

Strategic ICE: Advisory services for strategy are undergoing two changes. Are they paradigm shifts that will re-define the industry? No. Are they merely incremental moves along the existing curve? Time will tell; ex post facto pronouncements are always easier!

    The first change is the increasing number of strategy coaches who assist with the internal formulation of strategy, which is delivered by the organization´s own people. The second is the beginning of strategy services for the mass market with a different delivery system: the virtual coach on the Internet. On-line coaching with associated webinars is being targeted at the general business public. And this movement is gaining momentum.

Strategic ICE and Ice Qoogles (a kind of ice cube) and their allegorical transportation are discussed at "The Q-Ship" at Service.

An Economic History Postscript: Ice versus the Computer

-- a technology sprint --

The development of the ice industry makes for an interesting comparison with the computer industry. Granted, ice, specifically refrigeration, got off to a slow start. It does not appear to be moving anywhere fast nowadays either. But "every dog has its day" as described below. The first major technological breakthrough was in Iran. The Persian chemist and physicist Ibn Sina (Avicenna) invented the refrigerated coil in the 11th century. From this breakthrough to a commercial freezing unit took over 800 years! 

    The abacus notwithstanding (which was used since at least 500 BC), the first modern computer was the ENIAC at the University of Pennyslvania in 1946. From this room sized contraption, which weighed thirty tons, to the third generation of computers took less then twenty years. The third generation was successfully introduced by DEC in 1964 with the PDP-8 midrange computer, which came to be termed "minicomputer." The basic version cost $16,000 at a time when a new mid-range car, e.g. a Ford, cost $3,000 to $4,000.

    Everyone talks about the astonishing speed of computer development and market penetration: from the 1946 EINIAC to the 1964 minicomputer to the IBM PC of 1981, following Apple´s lead, to bring a computer to every desk. (The first PC was the little known MITS Altair 8800 in 1975, followed by the legendary Apple I in 1976.) The transition from expensive minicomputer to the ubiquitous "everyman" PC took about 17 years.

    For a brief while, ice moved faster, at least in the U.S. - the refrigerator sprint! One went from the midrange unit in 1915 to the "PC" unit, GE´s Monitor in 1927, in 12 years. The Monitor alone sold over a million units. Less than a decade after its introduction over 60% of U.S. households had one brand or another of refrigerator. Interestingly this level of market penetration was not reached in the United Kingdom for 40 years!

1 Both the coach and the consulting team are seeking to provide value to the client firm so that it achieves results. The relationship between the strategy coach and the senior partner in charge of the consulting engagement will determine in large part whether the two do, in fact, complement one another. Nevertheless, just as some negotiations are, per force, "win/lose" rather than the universally promulgated "win/win," sometimes the choice between a coaching firm and a consulting firm will also be an "either/or."

2 The source for the statistics in these paragraphs is "History of Ice Manufacturing at the Turn of the 20th Century" by Matt Moffatt.

    The author is indebted to Guy Kawasaki for calling his attention to the ice industry. He is a Silicon Valley entrepreneur and founder of the VC firm Garage Technology Ventures. Its website www.garage.com has excellent suggestions for anyone seeking funding. He is also an entertaining public speaker whose refreshingly self-deprecating delivery does not keep the competency from shining through. In talks based on one of his eight books, The Art of the Start, he illustrates the difference between moving along the curve versus competing on a new curve, a paradigm shift, with the development of the ice industry. YouTube has both long and short versions of the presentation based on the book, cf. "Guy Kawasaki The Art of the Start."

3 Ice harvesting died a lingering death. An interesting paradox emerged. The ice harvesters tried to compete against manufactured ice on quality. Natural ice was healthier. The cheaper it became to make ice, the more polluted the lakes and ponds were becoming, and the more vigorously were the claims made about the benefits of, so to speak, "organic" ice. As if pollution were not enough of a problem, consumers started to view ice deliveries not as "here comes respite" but rather as messy and inconvenient. The introduction of electric household refrigerators in the early 1900s struck the death knell for the "from ice factory to your home" delivery business.

4 The ice factories became possible with the advent of efficient ice machines. The first patented ice machine was followed by a steady stream of improvements.  Early examples include the patents by Professor Twining of New Haven, U.S. (1850), the steam engine driven ice-making machine by Dr. John Gorrie, U.S. (1851), as well as patents by Harrison of Australia (1857) and Siebe of London (1862), among others.  In the U.S. the ice factory industry, which took off in the early 1900s, was propelled by the Southern States. They resisted having to depend on the North for deliveries of ice. The source is "Ice Harvesting and History," collated from the Frank O´Brian collection by Ron Taylor.

5 The information for this paragraph is primarily taken from "refrigerators" Wikipedia (2010). Some supplemental information is from Matt Moffatt, op.cit. (footnote 2).

6 Home refrigerators did in fact lead to the extinction of one kind of ice factory, the kind with (or selling to) a supply chain of ice blockhouses aimed at home delivery. However the ice factories not pursuing the " blockhouse to wagon to your door" business model could survive. In fact, in 2002 in the U.S. there were 426 commercial ice factories supplying ice to the tune of $595,000,000 p.a. (Matt Moffatt, op.cit.)

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