Beware Management Consultants: Iceland's Parable of Captains and Rowers

A page on the corporate history site of the UK frozen-food retailer Iceland publishes a satirical parable under the heading "Beware management consultants". It appears in a chapter the retailer calls "The Dark Ages", and it concerns two racing boats.

Two boats and one difference

Both teams trained hard and arrived at the day of the first race ready to win. The green team won by one mile. Crushed by the defeat, the red team resolved to win the following year and set up a panel of auditors to establish what had gone wrong. After several weeks of gathering detailed intelligence, the auditors could find only one difference: the green team had seven rowers and one captain, while the red team had seven captains and one rower.

What the consultants advised

Unperturbed by the raw data, upper management showed unexpected wisdom and hired a consulting company to analyse it and propose a solution. After several months, the consultants concluded that the ratio of captains to rowers was the red team's problem. Their proposed fix was a restructure: four captains, led by two managers, reporting to one senior director, with a dotted line to the rower. Management also suggested it might improve the rower's working environment with a non-monetary reward and recognition scheme — if the rower's performance improved.

The sequel, and a new explanation

The next year the green team won by two miles. The red team's leadership immediately fired the rower for unsatisfactory performance, and paid a bonus to the captains, directors and managers for the leadership and motivation they had shown during the preparation phase, and as an incentive to find a better rower for the next race. The consulting company then prepared a fresh analysis of the restructuring: it found the strategy sound, the motivation great and the restructure correctly executed, but the tool actually used — which had not been part of the original data — sub-standard and in need of improvement.

What the parable illustrates

Currently, the page says, red team management is having a new boat designed and, to demonstrate fiscal and HR dexterity for stockholders, has outsourced the rowing to India. The tale turns on a single point: headcount grows on the coordination side while the boat gets slower, and accountability still lands on the one person doing the work.