CTRM & Commodity Value Chain Consulting Is More Than Just Giving Advice
Each year organisations spend billions of $’s with management consultants.
01 – Much of this money pays for impractical data and poorly implemented recommendations.
02 – To reduce this waste, clients need a better understanding of what consulting assignments can accomplish.
This series of posts grows out of current research on effective consulting in the CTRM & Commodity Value Chain space, including interview snippets and information from surveys we’ve conducted. It also stems from my experience overseeing programs in the commodities & energy sector and from the many conversations and associations I’ve had with consultants and clients the world over.
I’ve then attempted to join up this information to propose a means of clarifying the purposes of including consulting expertise into your CTRM / ETRM and commodity value chain projects. The engagement process is much more likely to be successful when both parties know what they are trying to accomplish.
Many firms and their members define management consulting in a variety of ways. You can categorise the activities based on the professionals’ expertise (for example, competitive analysis, corporate strategy, operations management, and human resources). However, there are as many differences within these categories as between them.
Another approach is to view the process as a sequence of phases—entry, contracting, diagnosis, data collection, feedback, implementation, and so on. However, these phases are usually less discrete than most generalist consultants admit.
Perhaps a more useful way of analysing the process is to consider its purposes; clarity about goals certainly influences an engagement’s success.
Here are fundamental objectives of consulting engagements:
01 – Providing information to a client.
02 – Solving a client’s problems.
03 – Making a diagnosis, which may necessitate a redefinition of the problem.
04 – Making recommendations based on the diagnosis.
05 – Assisting with the implementation of recommended solutions.
06 – Building a consensus and commitment around corrective action.
07 – Facilitating client learning—that is, teaching clients how to resolve similar problems in the future.
08 – Permanently improving organisational effectiveness.
Purposes 01 through 05 are generally considered legitimate functions, though some controversy surrounds purpose 05.
Clients are less likely to request and address purposes 06 through 08 explicitly, we however encourage our clients to take a holistic approach that includes a view across all of these purposes. Goals 06 through 08 are best-considered by-products of earlier purposes, not additional objectives that become relevant only when the other purposes have been achieved. They are essential to effective consulting outcomes even if not recognised as explicit goals when an engagement begins.
Moving toward the more ambitious purposes requires increasing sophistication and skill in managing the consultant-client relationship. We have observed consultancies attempting to shift the purpose of an engagement even though a shift is not called for; where they may have lost track of the line between what’s best for the client and what’s best for the consultant’s business. But reputable consultants do not usually try to prolong engagements or enlarge their scope.