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for general use. Such changes may not be real improvements even if they are well intentioned. Energy may be wasted if there is a misunderstanding about the purpose of the project and likely direction of the change effort, and about the sequence of steps in which the consultancy is being carried out. Some people may become disoriented – they change their method of work in good faith, but this is not appreciated by the consultant or by the managers.

These and similar misunderstandings can be prevented by giving frequent feedback from diagnostic work. The client and his or her staff need to know how the assignment is progressing, what facts have been established, what solutions are shaping up, and which findings are preliminary – requiring further fact-finding and verification – and which are final, capable of serving as a basis for action. There should be no ambiguity and no suspicion about the type of action that diagnosis is likely to recommend, or about the moment at which action can start.

On the other hand, getting the client’s reaction to the feedback given to him or her is feedback to the consultant. The consultant should seek this feedback as much as possible during the whole diagnostic phase.

8.2Diagnosing purposes and problems

Purposes

In Breakthrough thinking, Gerald Nadler and Shozo Hibino explain why focusing on purposes is fundamental to successful problem-solving.1 They emphasize that defining the purposes of working on a problem ensures that you will apply your efforts in areas where you can have the greatest impact. Instead of starting diagnosis by asking “What’s wrong here? What’s the matter?”, the consultant should ask first “What are we trying to accomplish here? What are we trying to do?” This will help to avoid (a) the conventional urge to start by collecting data and analysing the situation, and (b) working on or being sold a solution to a wrong problem (“moving faster in the wrong direction”).

An array of purposes to be achieved by the project should be constructed. In this way the consultant acknowledges that there is a wide range of motivations and results possible in applying change to an existing condition. The problem will be seen in the right perspective if the array of purposes listed is broad enough, and includes small and immediate purposes as well as very broad and far-reaching purposes that are beyond any immediate solution.

It will then be important to identify the focus purpose. This will be one that meets all or most of the criteria discussed and chosen by the consultant and the client (such as management’s aims, potential financial benefits, cost and capital factors, time limitations, constraints imposed by legislation, future development potential, employment potential, learning opportunities, etc.). Small, limited and trivial purposes that cannot meet these criteria will be eliminated. Excessively broad, distant, risky, costly or unrealistic purposes, as well as those that the stakeholders would not support, will also be eliminated (see example in box 8.1).

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Box 8.1 The focus purpose – an example

In one company, the problem as presented to a consultant was a deteriorating quality of several important products, and a growing number and frequency of customer complaints about quality. The discussion of possible purposes of a consulting project defined an array of purposes:

●restoring quality to its previous level and preventing its deterioration;

●preventing customer complaints;

●improving quality management (including better motivation for achieving and maintaining quality);

●increasing customer satisfaction;

●achieving an image of a high-quality producer;

●becoming a sector leader internationally in terms of quality.

The focus purpose chosen was “increasing customer satisfaction”. This embraced narrower purposes, such as improving product quality and assuring quality management, but eliminated wider and probably too ambitious purposes, such as international sector leadership in quality. Furthermore, it was agreed that improvements would need to be pursued in after-sales and maintenance services, customer information, behaviour of the sales technicians, product modernization practices, etc. This permitted a diagnosis and the subsequent activities of the consultant and the client to be focused on a clear and realistic purpose.

Problems

It may be useful to recollect what was said about business and management problems in section 1.2. There is a problem if (a) there is a difference between two situations: one real and one potential or desired, and (b) someone is concerned about this difference and wants to reduce it. This difference defines the problem with which the consultant is supposed to deal.

It is not so difficult to find out what is actually happening, i.e. the actual situation. In this chapter we will describe a number of fact-finding and analytical techniques that help the consultant to identify and understand the actual situation. To determine what should be happening in the future, i.e. the ideal or desired situation, is more complex, but is an essential part of problem diagnosis. For it is only in this way that the problem can be described and analysed, and the consultant’s work focused on purposes, future opportunities and improvements.

The client’s problem will be identified in terms of the following five principal dimensions or characteristics:

(1)Substance or identity. The substance or identity of the problem has to be described (poor performance; shortage of competent staff; lack of ideas on how to invest idle capital; desire to improve after-sales services). There is a need to establish the basis of comparison used and how it is justified. Why do we say that performance is poor? Poor by what standard? The various symptoms of the problem have to be described as well.

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(2)Organizational and physical location. In which organizational units (divisions, departments, subsidiaries) and physical units (plants, buildings, stores, offices) has the problem been observed? Which other units are or might be affected? How widespread is the problem? Does it affect external relationships?

(3)Problem ownership. Which people – managers, staff specialists, other workers – are affected by the existence of the problem and primarily interested in resolving it? Who is likely to make difficulties? Are they aware of the problem? Have they attempted to deal with it?

(4)Absolute and relative magnitude. How important is the problem in absolute terms (e.g. amount of working time or money lost, volume of underutilized productive capacity, potential future gains)? How important is it in relative terms (e.g. in comparison with other problems, or with total turnover)? How does it affect the unit where it has been observed, and the people who own the problem? How important is it to the organization as a whole? What will the organization gain if the problem is resolved?

(5)Time perspective. Since when has the problem existed? Has it been observed once, or several times, or is it recurrent? How frequently does it appear? What is its tendency: has the problem been stabilized, or is it increasing or decreasing? What forecasts can be made about the future evolution of the problem? Is a future problem anticipated?

Furthermore, diagnosis will aim to establish:

–the causes of the problem;

–other significant relationships;

–the client’s potential to solve the problem;

–possible directions of further action.

The causes of the problem

A key task in diagnosis is to identify the forces and factors that are causing the problem. The purpose is to understand the issue, not to point the finger at one or more culprits. The exercise will start with some preliminary knowledge or assumptions about what these causes might be. This will help to establish hypotheses on possible causes. It is useful to form as many hypotheses as possible, without, however, embarking on superficial speculation. Data-gathering and analysis will then focus mainly on the hypothetical causes, aiming to eliminate hypotheses that cannot be justified by the facts, and to add new hypotheses as they emerge. A rigorous scientific approach should be applied. The fact that it is difficult to find data in support of a hypothesis does not mean that the hypothesis should be dropped. Eventually the consultant should be able to identify the real cause or causes among the many factors that are in some way related to the problem (see section 8.4).

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Other significant relationships

Any business or management problem is interwoven with other problems; and there are other relationships in addition to that between a problem and its cause or causes. There may be factors that aggravate or alleviate the problem without being its direct cause. They can make the solution of the problem more or less difficult. In solving one problem, new problems may be discovered or created. Quite often a new bottleneck is created by removing an existing one. These relationships and potential problems and risks have to be identified and investigated.

The client’s potential to solve the problem

The client’s potential has several dimensions. It is necessary to find out whether he or she possesses the material and financial resources and the technical expertise required for solving the problem. If not, the consultancy will have to allow for developing this potential and extending help to the client as necessary. The time perspective is important. What has been the client’s experience in solving other problems and making organizational changes of various types and magnitudes? What is the client organization’s culture as regards change? How quickly is the client able to act? What will be the likely future development of the client’s resources in relation to the problem to be solved? Can he or she mobilize other resources? What attempts have been made to solve the given problem? Have past attempts failed? If so, why?

Considerable attention should be paid to the client’s attitudes to the given problem. How do people (at various levels and in various categories) perceive the problem? Are they aware of it and keen to make a change? Are they motivated to make a special effort? Are they prepared to take risks? Have they experienced the problem for so long that they have accommodated themselves to it?

Possible directions of further action

The purpose of diagnosis is preparation for action. Throughout the investigation, information and ideas on how the problem could be resolved and how this would contribute to meeting the client’s purposes and improving the business should be collected, recorded and analysed with the same care and determination as data on the nature and causes of the problem. This will provide a link to the next phase, action planning. Action proposals should emerge logically from diagnosis. However, the consultant should keep in mind the pitfalls of making premature changes before the facts have been established and conclusions drawn from diagnosis.

Main steps in diagnosis

The general framework provided above can be used by the consultant to make a detailed plan for diagnostic work, bearing in mind that the scope and

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