The document discusses how analogies can help solve complex problems in three steps: [1] Identify a useful source problem; [2] Understand the solution to the source problem; [3] Translate the solution to the target problem. It cautions that analogies should not be stretched too far and differences between the source and target problems need to be considered. Critical thinking is important to accurately apply analogies to strategic problems.

1. CONSULTING TOOLKIT
Consulting Skills:
Analogies
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2. Analogies help us solve complex problems (like strategy) when
analysis and trial and error are not enough
How analogies help us solve problems
1) Identify useful
Strategic source
Source
problem problem
Solve directly through:
•Fundamental analysis 2) Understand solution
•Trial and error
Strategic 3) Translate solution Source
Solution solution
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3. We use analogies all the time in business, to help us think
creatively and quickly
Most frequent useful analogies
Compare different countries Compare different industries
Outside business
From previous experience (e.g. science/politics)
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4. 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
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5. 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
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6. Critical to the good use of analogies is to look at the differences,
not just the similarities
Enron’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”
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7. You can use analogies more accurately if you consciously
challenge your logic at every step
How 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?
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8. You are likely to use a comparison in your project
Different types of comparison
Benchmarking Case Studies Analogy
(Best Practice)
Detailed, numerical Conceptual, insightful
Most Operational Any Strategic
useful consulting consulting
for: Same key questions:
•What is the same?
•What is different?
•Does it translate to our situation?
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9. EXAMPLE ANALOGIES
INFECTIOUS DISEASE: SPREAD THROUGH A POPULATION
How could you
use this analogy
in your project?
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10. EXAMPLE ANALOGIES
LEGO: MODULAR CONSTRUCTION
How could you
use this analogy
in your project?
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