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Consulting toolkit   analogies Consulting toolkit analogies Presentation Transcript

  • CONSULTING TOOLKIT Consulting Skills: Analogies© 2007-2012 IESIES Development Ltd. All Ltd. Reserved © 2007-2012 Development Rights All Rights Reserved
  • Analogies help us solve complex problems (like strategy) when analysis and trial and error are not enoughHow analogies help us solve problems 1) Identify useful Strategic source Source problem problemSolve directly through:•Fundamental analysis 2) Understand solution•Trial and error Strategic 3) Translate solution Source Solution solution © 2007-2012 IES Development Ltd. All Rights Reserved
  • We use analogies all the time in business, to help us think creatively and quicklyMost frequent useful analogies Compare different countries Compare different industries Outside business From previous experience (e.g. science/politics) © 2007-2012 IES Development Ltd. All Rights Reserved
  • One of the most successful entrepreneurial models is to transfer an idea across industries History of “big box” retailing 1962 1978 1983 1985 1986 1990 1996 © 2007-2012 IES Development Ltd. All Rights Reserved
  • You need to be carefuul that you don’t stretch analogies too far…..Enron Trading Business extensions Weather futures, Bandwidth Pulp, Steel, Coal trading Electricity trading Gas trading 1985 © 2007-2012 IES Development Ltd. All Rights Reserved 2001
  • Critical to the good use of analogies is to look at the differences, not just the similaritiesEnron’s Criteria for selecting new markets for their trading skills • Fragmented demand • Rapid change due to deregulation or technological progress • Complex and capital-intensive distribution systems • Lengthy sales cycles • Opaque pricing, and mismatches between long-term supply contracts and short-term fluctuations in customer demand Key missing question: What differences might prevent Enron trading profitably?Source: Rivkin, HBR “How strategists really think” © 2007-2012 IES Development Ltd. All Rights Reserved
  • You can use analogies more accurately if you consciously challenge your logic at every stepHow analogies help us solve problems 1) Identify useful Strategic source Source problem problem What is the same about the source problem? 2) Understand solution Solve directly through: What is different? •Fundamental analysis Are the differences important? •Trial and error Have we fully understood why the source solution worked? Strategic 3) Translate solution Source Solution solution Why would the source solution work for me? Why might the source solution not work? © 2007-2012 IES Development Ltd. All Rights Reserved
  • You are likely to use a comparison in your project Different types of comparison Benchmarking Case Studies Analogy (Best Practice) Detailed, numerical Conceptual, insightfulMost Operational Any Strategicuseful consulting consultingfor: Same key questions: •What is the same? •What is different? •Does it translate to our situation? © 2007-2012 IES Development Ltd. All Rights Reserved
  • EXAMPLE ANALOGIESINFECTIOUS DISEASE: SPREAD THROUGH A POPULATION How could you use this analogy in your project? © 2007-2012 IES Development Ltd. All Rights Reserved
  • EXAMPLE ANALOGIESLEGO: MODULAR CONSTRUCTION How could you use this analogy in your project? © 2007-2012 IES Development Ltd. All Rights Reserved