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StructuredProblemSolving&HypothesisGenerationStrategyisaboutthrivinginachangingworld…“Thepicture’sprettybleak,gentlemen...Theworld’sclimatesarechanging,themammalsaretakingover,andweallhaveabrainaboutthesizeofawalnut.〞…whichisallabout“decisionmaking〞“Strategyisaboutmakingdecisions〞Thebeststrategy“makers〞areabletoblendanalytictechniqueswithanunderstandingofthefutureuncertaintiesandsimplegoodluckBasedonoftenimperfectinformationtheymakedecisionsandthendriveimplementationTherearetwobasicapproachestoproblemsolving;butbothcanworkThe“there'saponyinheresomewhere〞approachThestructuredanalyticapproachPotentialforrichpowerfulsolutionsScurryaroundanalyzingtonsofdatatoseeifyoucanfindsomethingusefulGetthedataPotentialforgood(andmixed)solutionsDefineproblemandhypothesesDefiningtheissueisthefirststepinthejourneytofinalrecommendationsDevelopConclusionsandMakeRecommendationstoImplementFindInsightsAnalyseDataGatherDataFormHypothesesSowhat?—aha,newthoughtWhatyoushoulddo…andhowDefinetheIssuesWhatarethequestionskeepingyouawakeatnight?FactualinformationgatheredtoproveordisprovehypothesesAnalysewhatthedatatellsusStatementsthatprovidedirectionandstructurefortheanalysisHypothesesaredevelopedinthreestepsWhataretherealstrategicissues?Whatistheimpactontheorganisation?Whatarethepriorities?Wethink...Itlookslike...Therightanswermaybe...Theoptionscouldbe...Webelievethistobetrue...Aseriesofstatements,notyetbackedbydataBasedoninitialdatasearchorexpertopinionsAnumberofassertionsneedtobetrueforahypothesistobevalid.Isthereamarketforwhitelabelinsuranceproducts?DirectchannelsaregrowingRetailershaveastrongchannelandbrandThereareexistingproductsChubbInsurancecanaccessnewbusinessbyusingthebrandstrengthofTescoresultingIslowcostofacquisitionandprofitablebusinessDefinethequestionReviewandDescribeMultipleAssertionsFormthehypothesis123AhypothesisshouldidentifynotonlytheissuebutalsothecauseandtheimpactThinkthroughthesethreestagesasyoucreateahypothesistohelpyouplanouthowyouwilltestit:Whatistheissue?Whatistheunderlyingopportunity?Whereistheadvantage?Whatdoyouthinkcausestheissue?Whatarethekeydriversoftheprocess?Whatistheimpactoftheissue?Howcanwetellthereisanopportunity?Whydowecare?“xisanopportunity...〞“…dueto...〞“…resultingin...〞TheStructuredProblemSolvingProcesscoversthelifecycleofaconsultingengagementDefinetheProblemStructuretheProblemDevelopaHypothesisExecutetheAnalysisDevelopaRecommendationCreatetheCommunicationDeliverCommunicationFollowUpwithClientCoveredincurrentmoduleCoveredlaterintheweekTheBasics-ProblemSolvingApproachDEFINETHEPROBLEMSTRUCTURETHEANALYSISFINDTHESOLUTIONOurproblemsolvingapproachproducesresultsthroughansweringasimpleseriesofquestionsIsthereaproblemoropportunity?Ifsowheredoesitlie?Whydoesitexist?Whatcouldwedoaboutit?Whatshouldwedoaboutit?Fine,butIWIKH2dothis...Source:BarbaraMinto,“ThePyramidPrinciple〞.Alwaysask:“AretheyMutuallyExclusiveandComprehensivelyExhaustive(MECE)?〞Logicalpyramidsarebasictoolsforthisapproach,helpingyoutodefine,structureandsolvetheclient’sproblem1. Ideasatanylevelinthepyramidmustalwaysbesummariesoftheideasgroupedbelowthem2. Ideasineachgroupingmustalwaysbethesamekindofidea,andtheymustanswerthesamequestionimpliedbytheirsummary3. Ideasineachgroupingmustalwaysbeinalogicalorder:MainAssertionKeyLineDeductivelyorinductivelyTracecourseortimeorderDivideorstructuralorder(e.g.,Sales,Marketing,Manufacturing,etc.)Classifyordegreeorder(e.g.,mostimportant,2ndmostimportant,etc.)Haveabrainstormingcaseteammeeting30million?,Sales,Marketing,Manufacturing,etc.BrainTumorTaguchimethod—ask“5Why’s〞Whatistheunderlyingopportunity?RetailershaveastrongchannelandbrandStructuretheProblemPotentialforTherearetwobasicapproachestoproblemsolving;butbothcanworkSaleshavegonedownbecausethepriceistoohigh“Thepicture’sprettybleak,gentlemen.Whatistheimpactoftheissue?TheykeepyoureffortThinkabouttheproblemfromadifferentangleDefineandStructuretheProblem“Ifyoudon’tknowwhereyouaregoing,anyroadwilltakeyouthere.〞-AnonymousWhyproblemdefinitionmatters"MutuallyExclusiveandComprehensivelyExhaustive"ThemostimportantruleforanystructureyouimposeDivideClarifyDiagnostic

FrameworkCauseEffect

FrameworkStructural

FrameworkProblemStructureTohelpyousolveaproblem,yourstructuremust:DisaggregatetheproblemintosmallerandeasiertosolvecomponentsBea“MECE〞descriptionoftheproblemanditspossiblesolutionsTraceCauseTherearethreewaystostructureabusinessproblemSource:BarbaraMinto,“ThePyramidPrinciple〞.HeadHurtsPhysicalMentalExternalInternalStress,TensionHypochondriaBumped,BruisedHeadAllergiesBadWeather,SinusHeadache,

Flu,ColdBrainTumorWaterontheBrainExample1—disaggregatetheproblemintoadiagnosticsolutiontreeSCooPSource:BarbaraMinto,“ThePyramidPrinciple〞.StoreiswithinshoppingradiusdonotknowaboutthestoreknowaboutthestorenevervisitthestoreenterthestoredonotbuymakeapurchasedonotcomebackmakerepeatpurchasesLocationAdvertisingSignage,CIConversionCustomerValueRootCauseExample2(tracecause)—disaggregatetheproblemintoacause-effectframeworkHowcanTESCOimproveitssalesproductivity(sales/sq.ft.)?Exercise4—summaryperformancedataforacreditcardissuer…what’stheproblem?Note:Allfiguresin1000s.AssumenopriceinflationandthatinterestrateshaveremainedconstantThe80/20Rule…80%oftheanswerisin20%ofthedataOftenwemissthegoldminebecausewearebusytryingtovaluetheshackbuiltontopofitThisdata,takenfromarealclient(butrebased,)tellsthewholesorrystoryoftheirstrategicprobleminonepictureExercise5—

usinga“quickanddirty〞approachcanproducesurprisinglyaccurateresults30million?300million?3billion?30billion?300billion?HowMany(Retail)LitresofPetrolAreSoldinFrancePerYear?Data:FrenchPopulation~60million.1Gallon=3.8LitresDevelopaHypothesisExplicitlytiesyouranalysistoyourproblemdefinitionWhyhypothesesmatterTheykeepyoureffortHelpsdefinethelevelofaccuracythatmattersEnsuresyouanalyzenomorethanisneededtodisprovehypotheseswithinareasonabledoubtAllowsquickcheckbeforemassivedatacollectionandcrunching:“Ifweconfirmourbeliefinthehypothesis,willwebeabletoactonit?〞KeepsyouefficientOntargetAccurateMinimalActionableOnTimeSource:BarbaraMinto,“ThePyramidPrinciple〞.1.Rule2.Case3.ResultRuleCaseResultIfweputthepricetoo

high,saleswillgodownWehaveputpricestoohighTherefore,saleswillgodownCaseResultRuleWehaveputpricesupSaleshavegonedownSaleshavegonedownbecausethepriceistoohighSaleshavegonedownSalesgodownwhenpricesaretoohighProbablywehaveputpricestoohighHypothesisResultRuleCaseAbductionisavariationondeductiveandinductivereasoningandapowerfultooltodevelophypothesesDeductionInductionAbduction1.Case2.Result3.Rule1.Result2.Rule3.CaseDEVELOPAHYPOTHESIS Whatdifferentiatesagoodhypothesisfromabadone?Ontarget:Answersthecorequestionontheclients’mindAccurate:EmbracestheentirerangeofcompetitiveorprofitdriversMinimal:“Occam’srazor〞Actionable:CanbequantifiedandtestedOntimeGoodHypothesesAreCannotberefutedCannotpossiblybequantifiedRequireyouto“BoiltheOcean〞AresoobviousthatnobodycanintelligentlydisagreewithitOrlooklikeanabstractmodelofaprocessconsistingofboxes,arrowsandcloudsBadHypothesesDEVELOPAHYPOTHESIS HowtofindagoodhypothesisThereareprovenprocessestogeneratehypotheses:Talktolotsofpeople

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