Imagine going to see a surgeon because you’ve got a pain in your knee.
You explain the symptoms.
The surgeon listens carefully.
He examines you.
Then, before the scan results are back, he says:
“I think you’re going to need a major operation.”
You’d probably be concerned.
Then imagine discovering something else.
The surgeon owns the operating theatre.
He employs the surgical team.
He supplies the implants.
He runs the rehabilitation centre.
And the more extensive your treatment becomes, the more money he makes.
You might start wondering whether surgery really was the only answer.
That’s an uncomfortable analogy.
But it raises an important question.
Should the person diagnosing your problem have a commercial incentive to make the treatment bigger?
Consulting has lived with this problem for decades
The traditional model is familiar.
A consultancy offers a relatively inexpensive diagnostic.
A team arrives.
They interview management.
They analyse the business.
They identify dozens of improvement opportunities.
Then comes the presentation.
The strategy needs sharpening.
The operating model needs redesigning.
Processes need standardising.
Systems need replacing.
Data needs restructuring.
Capabilities need building.
People need training.
And, fortunately, the consultancy has exactly the team required to do all of those things.
The £20,000 diagnostic has discovered a £2 million transformation programme.
Perhaps they’re completely right.
But there is an unavoidable problem.
The diagnostic and the treatment aren’t economically independent.
The diagnostic can become a sales process
This doesn’t require anybody to behave dishonestly.
The incentives are subtler than that.
If your business model depends on large implementation programmes, you naturally develop methodologies that discover opportunities for large implementation programmes.
If you employ experts in organisational redesign, digital transformation, procurement, technology, strategy and change management, those capabilities naturally influence how you see the problem.
As the saying goes:
If all you have is a hammer, everything starts looking like a nail.
And if what you have is a 50-person transformation team, quite a lot of businesses start looking like transformation opportunities.
But what if the problem is much smaller?
Imagine a company with declining profitability.
A broad diagnostic finds:
Poor forecasting.
High inventory.
Low supplier performance.
Excessive freight costs.
Customer availability problems.
Weak planning disciplines.
Fragmented systems.
You could legitimately create seven workstreams.
But suppose those symptoms are connected.
Perhaps a relatively small number of economically important parts are repeatedly unavailable.
That causes expediting.
Expediting increases freight cost.
Shortages reduce sales.
People compensate by increasing inventory.
Planning becomes unstable.
Suppliers receive constantly changing requirements.
Now the picture looks different.
Seven transformation workstreams might actually be different symptoms of one underlying constraint.
If that’s true, transforming all seven areas isn’t comprehensive.
It’s unnecessary.
This is why diagnosis should have value on its own
At Mindsheet, we think a Precision Diagnostic should be a product in its own right.
You aren’t buying the first stage of a transformation programme.
You’re buying an answer.
What is the business trying to achieve?
What is preventing it achieving more?
What evidence supports that conclusion?
What causal mechanisms are producing the symptoms?
Where is the system constraint?
And what is the smallest credible intervention likely to change it?
That’s the deliverable.
The report should still have value if Mindsheet never does another day’s work for you.
In fact, that’s an important test of whether the diagnostic is genuinely independent.
Then decide who should fix it
Once you’ve identified the problem