CTRM & Commodity Value Chain Consulting Organising Purposes: Effective Diagnosis & Recommending Actions
3. Effective Diagnosis
Much of management consultants’ value lies in their expertise as diagnosticians. Nevertheless, the process by which an accurate diagnosis is formed sometimes strains the consultant-client relationship since managers are often fearful of uncovering difficult situations for which they might be blamed. Competent diagnosis requires more than an examination of the external environment, the technology and economics of the business, and the behaviour of non-managerial members of the organisation. The consultant must also ask why executives made certain choices that now appear to be mistakes or ignored certain factors that now seem important.
Although the need for independent diagnosis is often cited as a reason for using outsiders, drawing members of the client organisation into the diagnostic process makes good sense.
“We usually insist that client team members be assigned to the project. They, not us, must do the detailed work. We’ll help, we’ll push—but they’ll do it. While this is going on, we talk with the CEO regularly about the issues that are surfacing, and we meet with the chairman as well.
“In this way, we diagnose strategic problems in connection with organisational issues. We get some sense of the skills of the key people—what they can do and how they work. When we emerge with strategic and organisational recommendations, they are usually well accepted because they have been thoroughly tested.”
Clearly, when clients participate in the diagnostic process, they are more likely to acknowledge their role in problems and to accept a redefinition of the consultant’s task. Top firms, therefore, establish such mechanisms as joint consultant-client task forces to work on data analysis and other parts of the diagnostic process. As the process continues, managers naturally begin to implement corrective action without having to wait for formal recommendations.
4. Recommending Actions
The engagement characteristically concludes with a written report or oral presentation (or both) that summarises what the consultant has learned and that recommends in some detail what the client should do. Firms devote a great deal of effort to designing their reports so that the information and analysis are clearly presented and the recommendations are convincingly related to the diagnosis on which they are based. Many people would probably say that the purpose of the engagement is fulfilled when the professional presents a consistent, logical action plan of steps designed to improve the diagnosed problem. The consultant recommends, and the client decides whether and how to implement.
Though it may sound like a sensible division of the work, this setup is in many ways simplistic and unsatisfactory. Untold numbers of seemingly convincing reports, submitted at great expense, have no real impact because—due to constraints outside the consultant’s assumed remit—the relationship stops at the formulation of theoretically sound recommendations that can’t be implemented.
For example, one of our clients in a nationalised public utility struggled for years to improve efficiency through tighter financial control of decentralised operations. Recently a professor from the country’s leading management school conducted an extensive study of the utility and submitted 100 pages of recommendations. According to the CEO, this advice ignored big stumbling blocks—civil service regulations, employment conditions, and relations with state and local governments. So the report ended up on the client’s bookshelf next to two other expensive and unimplemented reports by well-known international consulting firms. This sort of thing happens more often than management consultants like to admit, and not only in developing countries.
In cases like these, each side blames the other.
Reasons are given like:
“my client lacks the ability or courage to take the necessary steps” or “this consultant did not help translate objectives into actions.”
Almost all the managers I interviewed about their experiences as clients complained about impractical recommendations. And consultants frequently blame clients for not having enough sense to do what is obviously needed. Unfortunately, this thinking may lead the client to look for yet another candidate to play the game with one more time. In the most successful relationships, there is not a rigid distinction between roles; formal recommendations should contain no surprises if the client helps develop them and the consultant is concerned and involved with their implementation.