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Three Approach to a Management Problem

  • Name
    Humam Fauzi

It is a book about problem solving that mainly revolves around three general approach that management consultant use which is

  1. Hypothesis Driven Path
  2. Issue Driven Path
  3. Design Thinking Path

The book itself structured like an paper in journals thus reader able to skip the part that they already know or just want to know few part.

It introduce it points well to someone who is not a part of management before thus make it accesible for a new manager or aspiring one. For an actual manager or management consultant, it iterate on basic management terms or methods so they may want to skip to the part they really need.

It also acknowledge many flaw in methods introduce here and show how to counter it and how to implement it in an example. This book throws copious amount of jargons but explain each of it quite well. This may a lot to take in but if we take it slow and applies it in real situation, we may have better grip of what author try to teach.

General points

4S Methods

  • 4S methods stands for State, Structure, Solve, and Sell

  • Regardless of the formulation, the same evidence should lead you to the same conclusion. Proving a hypothesis and disproving its opposite are logically equivalent and should be practically identical. Page 54, Location 1222

  • McKinsey core values, for instance, include a "non-hierarchial atmosphere" and the "obligation to disset". Page 53, Location 1238

  • Writing a full problem statement require you to examine five elements of the problemn -- abbreviated in the acronym TOSCA (Trouble, Owner, Success criteria, Constraints, and Actors). Page 58, Location 1357

  • Frame works are essential shortcuts for someone building an issue tree because they provide pre-package decompositions of typical, recurring business problem. Page 60, Location 1395

  • Sell the solution, focusing on the answer and your audience, not on how you solved the problem. Page 65, Location 1531

The TOSCA Framework

  • TOSCA stands for Trouble, Owner, Success criteria, Constraints, and Actors

  • The basic definition of trouble is a gap between an observation and an aspiration (or idealized word red.). Page 68, Location 1597

  • The distinction is critical for problem solvers. The observation of touble is the first step in stating the problem. It's an excellent time to ask yourself whether you are dealing with a well-known problem that belongs to a recognizable class of situations that calls for standardized remedies. Page 70, Location 1635

  • To focus on stating the problem, we need first to ignore the possible solutions. Asking the success criteria question is a tool to just that,

Structure the Problem: Pyramids and Trees

Basically pyramis are inductive reasoing which people gather facts around them and works to the primary hypothresis. Tree, on the other hand, works by defining the primary hypothesis and work from there to find out which fact that relevant.

  • You might also break these first - level conditions into sub-sub-hypotheses, until they are specific enought to be proven or disproven by analyses, facts, and data. Page 83, Location 1924

  • Proving one sufficient condition right is enought to validate a hypothesis, while proving one necessary condition wrong is enough to reject it. Page 85, Location 1956

  • Investigating a pre-sold solution saves you both unsolicited investigations and solution - selling efforts. Page 88, Location 2063

  • However, the tree must be trimmed based on likely impact, not because some areas are easier that others to search. Page 94, Location 2201

Structure the Problem: Analytical Frameworks

  • Functional frameworks are the core building blocks of business reasoning. Page 104, Location 2351

  • Every industry has its shortcuts to analyze the critical problems it routinely faces, and these frameworks are often embedded in the tools, methods, and decision rules it uses. Page 105, Location 2357

  • Good discipline is to break down complex problem using multiple frameworks. Page 105, Location 2382

  • Being familiar with the main functional frameworks is an essential skill for all problem solvers. Page 111, Location 2489

  • Put it another way, functional frameworks are MECE breakdown of generic problems. Each of functional frameworks reflect underlying assumptions and mental models. Page 120, Location 2675

  • Example of functional frameworks can be seen in Page 113, Location 2529

What is the example of functional frameworks and how it applies?

Solve the Problem: Eight Degrees of Analysis

  • Analyses can be thought of as a continuum that starts with accepted or indisuptable facts, and ends with subtle judgments.

    1. Hypotheses that can be taken as a given without further analysis
    2. Analyses requiring hard numbers that are easy to identify
    3. Assessment based on facts that are not numbers
    4. Hypotheses that can be settled by simple analysis beyond the facts
    5. Hypotheses that force you to make assumptions because the would ideally require data you can't obtain
    6. Hypotheses based on a special type of assumption: internal plans See next quote to see why
    7. Assumptions that call for technical experties
    8. Assumptions that are, irreducibly, a matter of judgement
  • Management team under pressure to improve their profitablity are typically overoptimistic in their plans. Page 131, Location 2834

  • Remember, the assumptions you make may seem obvious to you, but they are probably not obvious to your audience. Page 135, Location 2940

  • Four tips for making realistic assumptions

    1. Get physical to be realistic. Many assumptions are represented in abstract number such as percentage, ratios, and indices. It's easier to discuss tangible, physical quantities than abstractions
    2. Check that all your assumptions are consistent with one another. It is not uncommon to see different parts of the same presentation include incosistent assumptions on the timing of outside events, behavior, or basic input such as commodity.
    3. Benchmark your assumptions. The best way to bolster an assumption's credibility is to provice relevant comparables. If your assumption is calibrated on the market average or a relevant competitor.
    4. Test sensitivites. "If I'm wrong, will my conclusions change?" Would your conclusion still hold if an assumption about a key input change by, let's say, 20 percent. Even better, reverse the question and ask: by how much would your assumptions need to change either individually or collectively, for your conclusion to be wrong? Page 136, Location 2972
  • Common Analytical mistakes includes

    • Misleading data
    • Disputable timeframes
    • Biased sample
    • Unrealistic, untested, and hidden assumption

Redefine the Problem: The Design Thinking Path

  • When should you set aside the hypothesis driven and issue driven approaches we described before and use design thinking? Here is a quick test

    1. Is the problem human centered? Will the solution be designed for and used by people?
    2. Is the problem complex? Are there likely to be multiple explanations of the problem that are somehow interlinked?
    3. Are you uncertain about the causes of the problem? This is the primary cause why hypothesis pyramids and issue trees are not effective
    4. Are you struggling with precisely stating the problem? Page 147 Location 3260
  • There are, generally, five steps in design thinking

    1. Empathize
    2. Define
    3. Ideate
    4. Prototype
    5. Test

These are not waterfall ideas that after 1 comes 2 and so on. There are iteration happen between steps and there are possibilites that next step return to previous step for better iteration. Page 149 Location 3286

  • Four cornerstore of Design thinking

    • Divergence and Convergence the former used to generate many ideas and the latter for selecting and coning generated ideas
    • Concrete and Abstract altering between actual world such as people, artifacts, and experiences and abstract ideas, models, and theories
    • Iterative and Collaborative during all phases problem solvers require intense interaction between users, designers, and other stakeholders during all phases.
    • Creative and Tolerant which can be breakdown more as
      • Creative confidence
      • Tolerance of failure
      • Empathy
      • Comfort with ambiguity
      • Begin like a beginner` Page 150 Location 3324
  • Journey Maps used to observe how people interact with systems. This can be from the operator, if it is an artifact, customer experience and supporting staff. Journey map can be broken down to 5E

    1. Entice, thins that trigger users interest and attracted to a particular experience
    2. Enter, cues that guide and orient the user to begin the experience
    3. Engage, the specific tasks and interaction that involve the artifact
    4. Exit, cues that guide and orient the user to end the experience
    5. Extend, the post-exit reminders and follow-ups that keep the user connected to the experience Page 150 Location 3595
  • Research shows that when problem-solving questions are framed in exploratory, open-ended way, we imagine more options and identify better solutions than when we think in terms of what we should or must do. Page 163, Location 5824

Structure and Solve the Problem Using Design Thinking

  • To increase the odds finding innovative solutions to complex problems, you must abandon a convergent mindset--the temptation to critically evaluate ideas as they are generated--and adopt a divergent mindset that promotes volume and variety. Page 170, Location 3848

  • There are four guideline that we can follow to generate more ideas

    1. Diversify the team, teams composed of individuals with different, but relevant expertise usually do better that homogenous groups, as they generate a greater variety and volume of ideas.
    2. Defer judgement, resist the temptation to critically evaluate your team members' ideas and censor your own. You should decouple idea evaluation and generation. Being critical kills creativity.
    3. Go for quantity, generating more ideas can increase the chances of finding new and valuable solutions. Pushing for more ideas can energize idea generation and create a positive feedback effect as the generation of one idea triggers others.
    4. Be visual, always seek to make your thinking visible and mobile.
    5. Stay focused, Use the problem definition, design imperatives, and user personas from the Define state to inform and guide your ideation. Page 171 Location 3882
  • In the book Thinkertoys, Michael Michalko describes 33 techniques to aid in the production of innovative ideas.