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# Problem Solving and Decision Making

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A logical step by step guide to solve business problems, that lead to a suitable decision making course.

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### Problem Solving and Decision Making

1. 1. Problem Solving & Decision Making 2007
2. 2. C O N T E N T S <ul><li>Background to Problem Solving </li></ul><ul><li>Setting the Problem Statement </li></ul><ul><li>Analyze the Problem in Detail </li></ul><ul><li>Identify Likely Causes </li></ul><ul><li>Define Actual Causes </li></ul>
3. 3. Background to Problem Solving (1)
4. 4. What is PAID ? <ul><ul><li>A logical problem solving process can be done through some steps called &quot; PAID &quot; </li></ul></ul><ul><li>P roblem Statement </li></ul><ul><li>A nalyze the problem in detail </li></ul><ul><li>I dentify likely causes </li></ul><ul><li>D efine actual cause(s) </li></ul>
5. 5. <ul><li>Problems exist when someone or something is not performing as expected. </li></ul><ul><li>Action needs to be taken to solve the problem thus action should follow from a clear understanding of the problem. </li></ul><ul><li>To understand problem solving it is necessary to distinguish between symptoms of a problem and its causes. </li></ul>
6. 6. <ul><li>Identification of the cause of a problem is the key to problem solving. </li></ul><ul><li>Once you know the real cause of the problem, you can decide how to deal with it </li></ul>
7. 7. Causes and Symptoms of a Problem <ul><li>It is necessary to distinguish between the symptoms of a problem and its causes. </li></ul><ul><li>What is the best indication that a problem can be solved? </li></ul><ul><ul><li>The symptoms of the problem have been treated? </li></ul></ul><ul><ul><ul><li>OR </li></ul></ul></ul><ul><ul><li>The cause of the problem has been isolated? </li></ul></ul><ul><li>Sure symptoms treatment not a solution but once you have found the real cause of a problem you can decide how to deal with it. </li></ul>
8. 8. Diagram of a Problem <ul><li>Look at the diagram on the right. It shows performance over time. In this case it is constant, but is there a problem? </li></ul><ul><li>To help understand what we are looking for when finding the cause of a problem, it is worthwhile looking at a problem diagrammatically. </li></ul>Performance Expected Performance Actual Performance T I M E
9. 9. <ul><li>The area with the positive variance is called “Opportunity&quot; </li></ul><ul><li>An opportunity is the exact opposite of a problem. </li></ul><ul><li>They can be analyzed in the same way as problems. </li></ul><ul><li>You want to find out what caused an opportunity to happen that you can exploit it to the full or make it happen elsewhere. </li></ul>Positive Variance Opportunity Negative Variance Problem Performance Expected Performance Actual Performance T I M E Actual Performance
10. 10. <ul><li>Problems don't occur without a reason. </li></ul><ul><li>In any situation with a problem, there must be an historical point. </li></ul><ul><ul><li>When actual performance started to deviate. </li></ul></ul><ul><li>Something happened at the time x which caused the problem to occur. </li></ul>Performance Expected Performance T I M E Actual Performance Positive Variance Opportunity Negative Variance ProblemX X
11. 11. Problem Solving Action Flow <ul><li>Set a P roblem Statement </li></ul><ul><ul><li>Describe the problem </li></ul></ul><ul><ul><li>Develop a one sentence problem statement </li></ul></ul><ul><li>A nalyze the problem in detail </li></ul><ul><ul><li>Analyze what is wrong </li></ul></ul><ul><ul><li>Analyze what is right </li></ul></ul><ul><li>I dentify likely causes </li></ul><ul><ul><li>What's different? </li></ul></ul><ul><ul><li>What has changed? </li></ul></ul><ul><ul><li>What are the most likely explanations? </li></ul></ul><ul><li>D efine actual cause/s </li></ul><ul><ul><li>What is the most likely explanation? </li></ul></ul><ul><ul><li>Can I prove it? </li></ul></ul>
12. 12. Avoiding Pitfalls <ul><li>(A) Giving up too early </li></ul><ul><li>(B) Jumping straight to conclusions about the cause </li></ul><ul><li>(C) Not getting the right people involved </li></ul><ul><li>(D) Not collecting all the relevant data </li></ul><ul><li>The worst one is “B &quot; because. It is always very tempting to think you know the cause of a problem straight away, jump to conclusions and take action to solve it. </li></ul>
13. 13. Setting the Problem Statement (2) Describe the problem Develop a one sentence problem statement
14. 14. Describe the Problem <ul><li>The purpose of describing the problem is to create an impressionistic view of it - something on which to lay a solid foundation for further work. </li></ul><ul><li>Choose what you would do first from this list: </li></ul><ul><ul><li>Write down a list of possible causes </li></ul></ul><ul><ul><li>Undertake a detailed analysis to produce a structured picture of the problem </li></ul></ul><ul><ul><li>Write down everything you know about the problem </li></ul></ul><ul><ul><li>Interview the people you think are to blame for the problem </li></ul></ul>
15. 15. Describe the Problem <ul><li>The purpose of describing the problem is to create an impressionistic view of it - something on which to lay a solid foundation for further work. </li></ul><ul><li>Choose what you would do first from this list: </li></ul><ul><ul><li>Write down a list of possible causes </li></ul></ul><ul><ul><li>Undertake a detailed analysis to produce a structured picture of the problem </li></ul></ul><ul><ul><li>Write down everything you know about the problem </li></ul></ul><ul><ul><li>Interview the people you think are to blame for the problem </li></ul></ul>
16. 16. Brainstorming <ul><li>Creative thinking techniques have a potentially powerful role in the PAID process. </li></ul><ul><li>They are a very good starting point when you have a blank piece of paper. </li></ul><ul><li>They can help you get insights into the nature of the problem that purely analytical techniques couldn't. </li></ul><ul><li>many people broadly know what it means, but don't do it properly. </li></ul><ul><li>Even though it's a creative thinking technique it has several rules which must be followed to make it work. </li></ul>
17. 17. Brainstorming <ul><li>See if you can identify what we can use brainstorming for as part of sorting out a statement of the problem. </li></ul><ul><ul><li>To generate as many ideas as possible about: </li></ul></ul><ul><ul><ul><li>The overall nature of the problem </li></ul></ul></ul><ul><ul><ul><li>The actions to be taken to solve the problem </li></ul></ul></ul><ul><ul><ul><li>Possible causes of the problem </li></ul></ul></ul><ul><ul><ul><li>Specific aspects of the problem </li></ul></ul></ul>
18. 18. Brainstorming <ul><li>See if you can identify what we can use brainstorming for as part of sorting out a statement of the problem. </li></ul><ul><ul><li>To generate as many ideas as possible about: </li></ul></ul><ul><ul><ul><li>The overall nature of the problem </li></ul></ul></ul><ul><ul><ul><li>The actions to be taken to solve the problem </li></ul></ul></ul><ul><ul><ul><li>Possible causes of the problem </li></ul></ul></ul><ul><ul><ul><li>Specific aspects of the problem </li></ul></ul></ul>
19. 19. Brainstorming <ul><li>You are the leader of a brainstorm session looking at a customer service problem. </li></ul><ul><ul><li>A member of the group gives an idea you know is completely irrelevant. What should you do?  </li></ul></ul><ul><ul><ul><li>Write down the idea as stated </li></ul></ul></ul><ul><ul><ul><li>Modify the idea to make it relevant and write that down </li></ul></ul></ul><ul><ul><ul><li>Ignore the idea completely </li></ul></ul></ul><ul><ul><ul><li>Ask members of the group whether they think the idea is relevant </li></ul></ul></ul>
20. 20. Brainstorming <ul><li>You are the leader of a brainstorm session looking at a customer service problem. </li></ul><ul><ul><li>A member of the group gives an idea you know is completely irrelevant. What should you do?  </li></ul></ul><ul><ul><ul><li>Write down the idea as stated </li></ul></ul></ul><ul><ul><ul><li>Modify the idea to make it relevant and write that down </li></ul></ul></ul><ul><ul><ul><li>Ignore the idea completely </li></ul></ul></ul><ul><ul><ul><li>Ask members of the group whether they think the idea is relevant </li></ul></ul></ul>
21. 21. Bug Listing <ul><li>When listing the things they liked, the group got a very different set of ideas. </li></ul><ul><li>It is quick and easy to use and very useful for getting a feel about problems. It can also be used later when you are looking for the areas you need to specify in detail. </li></ul>
22. 22. Reversals <ul><li>'Reversals' is a simple technique which is useful at any stage in the PAID process. </li></ul><ul><li>It is good to use at the start of the process because it's fun. </li></ul><ul><li>You simply take an issue that you planned to brainstorm and reverse it! </li></ul><ul><li>You then brainstorm the reversed issue. It's best explained by example. Here are a few issues and possible reversals: </li></ul><ul><ul><li>How to attract more customers into my store </li></ul></ul><ul><ul><ul><li>How to reduce the number of customers visiting my store </li></ul></ul></ul><ul><ul><li>How to improve the quality of customer service </li></ul></ul><ul><ul><ul><li>How to reduce the quality of customer service </li></ul></ul></ul>
23. 23. Setting the Problem Statement <ul><li>A problem statement is a single sentence which embraces your understanding of the problem. </li></ul><ul><ul><li>Not the cause of the problem, but the problem itself. </li></ul></ul><ul><li>Setting the problem statement is the single most important action you will take in the whole problem solving process. </li></ul><ul><li>It is so important that you must be prepared to put in time and effort to get it right. </li></ul>
24. 24. Setting the Problem Statement <ul><li>But why is setting the problem statement so important? </li></ul><ul><li>Several potential reasons are given below </li></ul><ul><ul><ul><li>Get the problem statement wrong and you will search in the wrong areas for the problem's cause. </li></ul></ul></ul><ul><ul><ul><li>A clear problem statement enables you to decide what work must be completed to find the cause. </li></ul></ul></ul><ul><ul><ul><li>Keeping the problem statement visible during the search for the cause keeps effort focused in the right area. </li></ul></ul></ul><ul><li>The problem statement provides the context within which all further work takes place. </li></ul>
25. 25. Effective Problem Statements <ul><li>If a problem statement is to do its job it must be: </li></ul><ul><ul><li>A single sentence. </li></ul></ul><ul><ul><li>Precise.  </li></ul></ul><ul><ul><li>Understandable to a person with no knowledge of the problem area. </li></ul></ul><ul><ul><li>Neutral. </li></ul></ul><ul><ul><li>Based on the description of the problem. </li></ul></ul>
26. 26. The Completed First Stage <ul><li>When you have completed the first stage of the PAID problem solving process you will have: </li></ul><ul><li>A description of the problem. This will probably contain things like: </li></ul><ul><ul><li>Your notes on how you see the problem </li></ul></ul><ul><ul><li>Notes of conversations with other people involved </li></ul></ul><ul><ul><li>Examples of how the problem manifests itself </li></ul></ul><ul><ul><li>Write-ups of brainstorms, bug lists or reversals </li></ul></ul><ul><ul><li>Any available statistics which showed you have a problem </li></ul></ul><ul><li>You will then sort out all this information to produce: </li></ul><ul><li>The Problem Statement </li></ul><ul><li>A one sentence statement which incorporates your understanding of the problem </li></ul>
27. 27. Analyze the Problem in Detail (3) Analyze what is wrong Analyze what is right
28. 28. Analyzing what is wrong <ul><li>Here you are aiming to develop a detailed specification of the problem. </li></ul><ul><li>This involves measuring its scale and scope, determining what the detailed symptoms are and the negative consequences they cause. </li></ul><ul><li>It also needs to determine who is involved and when and how often the problem occurs. </li></ul>
29. 29. Analyzing what is right <ul><li>The purpose of this is to determine what the problem is not . </li></ul><ul><li>If things are going well, then they can't be part of the problem. </li></ul><ul><li>By analyzing what is right you can eliminate potential causes of the problem and limit the scope of your investigation. </li></ul>
30. 30. Overview Analyze the Problem in Detail <ul><li>Though both activities are equally important, this is rarely reflected in how problem solvers behave. </li></ul><ul><li>Individuals and teams attempting to solve important organizational problems, nearly always focus on what is wrong, ignoring what is right. </li></ul>
31. 31. Overview Analyze the Problem in Detail <ul><li>The result are solutions that come to wrong conclusions, vital aspects of the situation are ignored and underlying problems remain unsolved. </li></ul><ul><li>Make sure you avoid the trap of concentrating only on what is wrong and ignoring what is right </li></ul>
32. 32. The Role of Questions <ul><li>Asking questions is the key to analyzing problems. </li></ul><ul><li>A systematic approach to questioning ensures you don't miss any important areas. </li></ul><ul><li>If you don't ask the right questions, you can't possibly get the right answers. </li></ul><ul><li>The best questions nearly always start with: </li></ul><ul><li>What? Why? When? </li></ul><ul><li>Who? Where? How much? </li></ul><ul><li>Because such questions cannot be answered with a single word, but require some form of comment </li></ul>
33. 33. How do you decide which questions to ask? <ul><li>Essentially, your problem statement and description of the problem are the best starting points for generating questions. </li></ul><ul><li>You should also think of holding a creative thinking session to generate questions. </li></ul><ul><li>This is an area where the techniques are particularly useful. </li></ul><ul><li>Brainstorming, bug listing and reversals can all be used in this context. </li></ul>
34. 34. Herringbones <ul><li>Herringbones are a variant of the Ishikawa Fish Bone and serve the same purpose. </li></ul><ul><li>The Ishikawa Fish Bone was invented in Japan for use by teams working in quality circles when trying to solve problems. </li></ul><ul><li>They are most commonly used in operations departments. </li></ul>
35. 35. Herringbones <ul><li>The technique is particularly useful in determining what needs to be analyzed. </li></ul><ul><li>A herringbone is like a structured brainstorm. </li></ul><ul><li>You write down the issue you want to cover in the box marked 'Problem Statement', then brainstorm it using the headings on the herringbone. </li></ul>
36. 36. <ul><li>Look at an example of a completed herringbone </li></ul><ul><li>The issue was a backlog of work. </li></ul><ul><li>A herringbone is a structured brainstorm, where the headings on each 'bone' provide a structure appropriate to the problem that needs to be solved . </li></ul>
37. 37. Analyzing the Problem <ul><li>Here are some what questions you might find handy when attempting to solve a problem. </li></ul><ul><li>The list isn't exhaustive, but should be enough to give you a clue how to go about using them. </li></ul>Questioning Tool Box What is wrong? What did you do about it? What was the result? What happened next? What was their reaction? What are the symptoms? What are their effects? What did you notice first?
38. 38. Analyzing the Problem <ul><li>&quot;When&quot; questions aim to pinpoint exactly when the symptoms began to appear. </li></ul><ul><li>In other words you are trying to track down the point x in time. </li></ul><ul><li>So the key question is: When did it start going wrong? </li></ul><ul><li>If you can discover the point x , then something must have happened at that point in time to cause the symptoms. </li></ul><ul><li>Once you discover what happened, then you have found the cause of the problem. </li></ul>
39. 39. Analyzing the Problem <ul><li>Where questions isolate the parts of the organization or geographical area where the symptoms are being experienced. </li></ul><ul><li>There is no point in looking for the cause of a problem in areas of the organization which don't exhibit symptoms. </li></ul><ul><li>You also need to know who is involved </li></ul>
40. 40. Analyzing the Problem <ul><li>To summaries, the key questions you need to ask are: </li></ul><ul><ul><li>What is wrong? </li></ul></ul><ul><ul><li>When did it go wrong? </li></ul></ul><ul><ul><li>How much went wrong? </li></ul></ul><ul><ul><li>Where did it go wrong? </li></ul></ul><ul><ul><li>Who is involved? </li></ul></ul>
41. 41. Analyzing What is Right <ul><li>There is no need to go into detail about the types of question you should ask to explore what is right. </li></ul><ul><li>They are the mirror images of those you ask when analyzing what is wrong. </li></ul><ul><li>Basically, they are based around: </li></ul><ul><ul><li>What am I satisfied with? </li></ul></ul><ul><ul><li>When are things correct? </li></ul></ul><ul><ul><li>How much is correct? </li></ul></ul><ul><ul><li>Where are things correct? </li></ul></ul><ul><ul><li>Who is not involved? </li></ul></ul>
42. 42. Identify Likely Causes (4) What's different? What has changed? What are the most likely causes?
43. 43. Identify Likely Causes <ul><li>Identify the differences between what you have identified from your analysis of what is right and what is wrong. </li></ul><ul><ul><li>This will enable you to discover what is distinctive about the problem. </li></ul></ul><ul><li>What has changed? Something happened to cause the problem. </li></ul><ul><ul><li>So what things changed round about the time the problem started to manifest itself. </li></ul></ul><ul><li>What are the most likely explanations? </li></ul><ul><ul><li>The work you have done so far should enable you to identify potential causes of the problem. </li></ul></ul>
44. 44. What's Different? <ul><li>In this stage of the PAID process you are looking for things which are: </li></ul><ul><ul><li>Distinctive in the symptoms identified which distinguish the problem situation from the areas where you are satisfied </li></ul></ul><ul><ul><li>Distinctive in the parts of the organization and specific locations where the problem arises which distinguish them from the areas where you are satisfied </li></ul></ul>
45. 45. What's Different? <ul><li>In this stage of the PAID process you are looking for things which are: </li></ul><ul><ul><li>Distinctive about the time a problem arises from times when it does not </li></ul></ul><ul><ul><li>Different about a group which is affected by the problem compared to groups which are not affected by it </li></ul></ul>
46. 46. What Has Changed? <ul><li>Often the changes involve: </li></ul><ul><ul><li>People . These include changes in personnel, organization structure, workgroups, skill levels and leadership style </li></ul></ul><ul><ul><li>Materials . Use of different materials, changes in material specification and changes in quality are all relevant </li></ul></ul>
47. 47. What Has Changed? <ul><li>Often the changes involve : </li></ul><ul><ul><li>Equipment . This includes introduction of new equipment and changes in maintenance procedures </li></ul></ul><ul><ul><li>Processes . Introduction of new systems and procedures, changes to patterns of communication, training processes and so on </li></ul></ul>
48. 48. Define Actual Causes (5) What is the most likely explanation? Can I prove it?
49. 49. Define Actual Causes <ul><li>Identifying what is the most likely explanation. </li></ul><ul><ul><li>Of all the potential causes identified which is the most likely explanation for all the symptoms which have been identified? </li></ul></ul><ul><li>Proving the cause. </li></ul><ul><ul><li>This involves testing whether the cause identified can explain all the symptoms presented by the problem. </li></ul></ul>
50. 50. The Most Likely Cause <ul><li>Does it explain all the data you have collected about the problem and what is wrong? </li></ul><ul><li>Is it consistent with the data you have collected about things which are right? </li></ul><ul><li>If the potential cause should be generating symptoms in areas which are right, but it is not, then that cause can be eliminated. </li></ul>
51. 51. The Most Likely Cause <ul><li>They would be solving the wrong problem. </li></ul><ul><li>They would focus on initiatives to sign up new retailers or retaining sales executives. </li></ul><ul><li>They would be taking action in relation to a symptom. </li></ul>
52. 52. Proving the Cause <ul><li>Identification of the cause of a problem will almost inevitably lead to action designed to eliminate it. </li></ul><ul><li>Deciding what to do involve decision making which is a distinct process in its own right and is dealt with in next chapter. </li></ul><ul><li>If action is taken to eliminate the wrong cause, there is a strong possibility that your actions will only make matters worse. </li></ul><ul><li>Therefore, it is often worthwhile seeing if you can prove that the most likely explanation is the actual cause. </li></ul>
53. 53. Proving the Cause <ul><li>Proving the cause involves: </li></ul><ul><ul><li>Checking that the actual cause identified does explain all the facts at your disposal </li></ul></ul><ul><ul><li>About both the problem and those things that are right. </li></ul></ul><ul><li>Testing that any assumptions you have made which support the analysis are accurate. </li></ul><ul><li>Trying to replicate the problem situation in a controlled test. </li></ul>
54. 54. Review <ul><li>Once you have found the cause you should conduct a review to see if you can improve your performance next time round. The review should focus on three basic questions: </li></ul><ul><ul><li>What went well? </li></ul></ul><ul><ul><li>What went less well? </li></ul></ul><ul><ul><li>What should we do differently next time? </li></ul></ul>
55. 55. Problem Solving <ul><li>Background to Problem Solving </li></ul><ul><li>Setting the Problem Statement </li></ul><ul><li>Analyze the Problem in Detail </li></ul><ul><li>Identify Likely Causes </li></ul><ul><li>Define Actual Causes </li></ul>
56. 56. Decision Making The ICES decision making process stands for I nitiate C riteria E valuate S elect
57. 57. Decision Making <ul><li>A decision is about making choices. </li></ul><ul><li>It is the cut off point at which you stop the process of thinking and begin the process of action. </li></ul><ul><li>There are many types of decisions including: </li></ul><ul><ul><li>Yes or no decisions </li></ul></ul><ul><ul><li>Choose from a list </li></ul></ul><ul><ul><li>Creative </li></ul></ul>
58. 58. Making Decisions <ul><li>If a decision is a cut off point when the thinking process stops, </li></ul><ul><li>Clearly the quality of thinking determines the quality of decisions. </li></ul><ul><li>But what is involved in the thinking process? </li></ul><ul><li>There are many ways to make decisions and all manners of decisions to be made. </li></ul><ul><li>Which do you think are the most difficult type? </li></ul><ul><li>All of them…! </li></ul>
59. 59. The ICES Process <ul><li>INITIATE: Deciding what to decide </li></ul><ul><ul><li>This is the first important stage of any decision making process - INITIATING THE DECISION </li></ul></ul><ul><li>CRITERIA : Defining exactly what you want </li></ul><ul><li>EVALUATE : Evaluating the options available </li></ul><ul><ul><li>EVALUATING the options against the CRITERIA. </li></ul></ul><ul><li>SELECT: Selecting the best option </li></ul>
60. 60. Evaluating Options <ul><li>Generating several options will normally help you to select the one that will best help you achieve your decision’s objectives. </li></ul><ul><li>The time and effort spent generating options depends on the importance of the decision being made. </li></ul><ul><li>Options can be generated by: </li></ul><ul><ul><li>Research </li></ul></ul><ul><ul><li>Informal discussion </li></ul></ul><ul><ul><li>Brainstorming </li></ul></ul><ul><ul><li>Meetings </li></ul></ul>
61. 61. Evaluating Options <ul><li>So far you’ve learnt how to initiate the decision making process by: </li></ul><ul><ul><li>Describing the decision to be made </li></ul></ul><ul><ul><li>Producing a set of essential and desirable criteria </li></ul></ul><ul><li>There is not an optimum number of options for making an effective decision </li></ul><ul><li>Sometimes a decision is simply just yes or no or a choice between two things. </li></ul>
62. 62. Thank You..!