Management consulting

appropriate, the consultant may also provide technical information on the problem under discussion (e.g. data from similar organizations for comparison), or help to collect input data on which the groups can work.

Self-diagnosis by individual business owners or managers is another approach which has been used in assisting small firms in various countries. The consultant meets with a group of owners or managers of small firms, provides them with a self-diagnostic instrument adapted to their needs, and explains the method to be used. He or she is then available to review the results of the diagnosis and proposals for action with each individual. Alternatively, the business people may agree to meet again to compare indicators characteristic of their firms, and exchange views on factors explaining differences in performance. They may then decide individually or as a group on the courses of action to follow in each firm. The consultant may be engaged to help them in further group work, or work separately with individual members of the group (see also Chapter 24).

Self-diagnosis can be an individual exercise undertaken by one client firm from the outset. The consultant may supply checklists and methodological tools for the client’s use. Or the client may apply his or her own diagnostic approach based on industry experience and practices; the consultant’s role is then to check the client’s self-diagnosis for completeness and accuracy. The consultant could also help the client to view the business from a wider perspective.

Further approaches are described in section 4.5.

7.3Terms of reference

Terms of reference (see box 7.3) are the initial statement of the work to be undertaken by a consultant. Some clients, who prefer to do their own problem identification and diagnosis, may prepare terms of reference for the assignment before talking to any consultant. Others may draft the terms of reference after the preliminary problem diagnosis done by a consultant. They may use one consultant specifically for preliminary diagnosis and drafting terms of reference. These terms are then used for initiating a formal selection procedure to designate another consultant who will execute the assignment. The consultant who was employed for drafting the terms of reference may even be excluded from the next phase. Still others may not use any formal terms of reference, but leave the definition of the work to be done to the consulting contract.

The main reasons for these different practices are explained below.

(1)If terms of reference are used:

–the client’s policy is to do as much analytical and planning work as possible before considering to use a consultant; often this will be the case with assignments dealing with relatively narrow and well-defined technical issues;

–the client (usually in the public sector) is obliged by existing regulations to draft formal terms of reference, and obtain approval of them, as an initial step in a formal consultant selection procedure.

166