The document discusses structured problem solving and hypothesis generation. It explains that structured problem solving is a formal approach to organizing thinking. The key aspects are defining the problem, developing hypotheses to prove or disprove potential causes, and structuring the analysis using logical frameworks. Hypothesis generation aims to identify the root cause of an issue by stating what the issue is, what causes it, and what the impact is. Developing good hypotheses involves asking questions, validating initial hypotheses, thinking outside the box, and using abduction, which is a variation of deductive and inductive reasoning.

1. Structured Problem Solving &
Hypothesis Generation

2. What We Will Cover
• What Is Structured Problem Solving?
• How Do We Define the Problem?
• How Do We Generate Hypothesis about the Root Cause of a
Problem?
• How Do We Structure our Hypothesis using the Fish Bone
Approach?
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3. What is Structured Problem Solving?
Structured problem solving is a formal approach to
organizing peoples’ thinking
1. Define the Problem
• Understand the problem statement
• Facilitate understanding of the issue
2. Develop a Hypothesis
• Used to prove (or disprove) our logic
• Which if ―true‖ we can use to solve the underlying cause
3. Structure the Analysis
• Use a logical framework to analyze the problem
• Use the Root Cause Analysis to group your ideas
To help you solve a problem, your structure must disaggregate the problem into
smaller and easier to solve components.
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4. Our problem solving approach begins by answering a simple series
of questions
• Is there a problem or opportunity? DEFINE THE
PROBLEM
• If so where does it lie?
IDENTIFY
ROOT CAUSE
• Why does it exist?
STRUCTURE
THE ANALYSIS
• What could we do about it?
• What should we do about it? FIND THE
SOLUTION
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5. Defining the issue is the 1st step in the journey to final recommendations
Develop
Conclusions and
Define the Form Analyze
Gather Data Find Insights Make
Issues Hypotheses Data Recommendations
to Implement
What are the Statements Factual Analyze what So what? - What you
questions that provide information the data tells aha, new should do…
keeping you direction and gathered to us thought and how
awake at structure for prove or
night? the analysis disprove
hypotheses
Because “If you don’t know where you are going, any road will take you there.” Anonymous
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6. How do we define a problem?
Start your thinking by being ...
Mutually
Exclusive and
MECE
Comprehensively
Exhaustive
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7. Start with the right definitions – Is this Chart MECE?
US Car Market
Light Passenger
Big 3
Trucks Cars
Sport
Mini Vans Utility Ford GM Chrysler
Vehicles
Clarity of the problem up front will set your subsequent analysis up to succeed!
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8. Typically, logical pyramids help you to define, disaggregate, structure and
ultimately, solve the business problem
To understand the problem, assertions or ideas must be:
• Summaries of the ideas grouped below them
• The same kind of idea, and they must answer the same question implied by their
summary
• In a logical order:
- Deductively or inductively
- Trace course or time order
- Divide or structural order (e.g., Sales, Marketing, Manufacturing, etc.)
- Classify or degree order (e.g., most important, 2nd most important, etc.)
Main
Assertion
Key Line
Source: Barbara Minto, ―The Pyramid Principle‖.
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9. Logical pyramids increase the effectiveness of problem solving, results
delivery, and communication
Logical pyramids  Vertical structure
have simple  Horizontal structure
rules…
 Key line / narrative
…but help ensure  The effectiveness of our work depends heavily on how
thorough compellingly we can argue that the solution we put forward serves
analysis… the organization best
…while  The reasoning we have to apply to come to our solution is complex
decreasing and difficult to summarize for brief stakeholder interactions
complexity…
…and increasing  To build succinct and compelling presentations of our work, we use
the power of logical pyramids as the preferred communication style:
presentations – Pyramids make information more memorable and meaningful
– They lead to a clearer definition of the problems we solve
…which will make
your work/life much – They structure our solutions to these problems and make them more
easier to handle compelling
Source: Barbara Minto, ―The Pyramid Principle‖.
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10. Hypothesis generation ensures that we get to the Root Cause of our
business problem
Develop
Conclusions and
Define the Form
Gather Data Analyze Data Find Insights Make
Issues Hypotheses
Recommendations
to Implement
What are the Statements that Factual Analyze what So what? —aha, What you should
questions provide information the data tells us new thought do… and how
keeping you direction and gathered to
awake at night? structure for the prove or
analysis disprove
hypotheses
“Hypothesis: a Tentative Assumption made in order to draw out and test its logical
or empirical consequences” Webster’s Dictionary
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11. A hypothesis should identify not only the issue but also the cause and the
impact
Think through these 3 stages as you create a hypothesis to help
you plan out how you will test it:
What is the issue?
―X is xxx‖ or ―X is an
• What is the underlying opportunity? opportunity …‖
• Where is the advantage?
What do you think causes the issue?
―… due to …‖
• What are the key drivers of the process?
What is the impact of the issue?
• How can we tell there is an opportunity? ―… resulting in …‖
• Why do we care?
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12. Hypotheses are developed in 3 steps
1 • What are the real strategic issues?
Define the • What is the impact on the Is there a market for white label
question organisation? insurance products?
• What are the priorities?
2 • We believe this to be true . . . • Direct channels are growing
Review and
Describe • A series of statements, not yet • Retailers have a strong
Multiple backed by data channel and brand
Assertions • Based on initial data search or • There are existing products
expert opinions
3 • We think . . . Chubb Insurance can access
• It looks like . . . new business by using the
Form the
brand strength of Tesco
hypothesis • The right answer may be . . . resulting In low cost acquisitions
• The options could be . . . and profitable business
A number of assertions need to be true for a hypothesis to be valid.
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13. How to find a good hypothesis
Start by Asking Questions:
• Talk to lots of people about the core problem
• Brainstorming during case team meeting
• Ask ―5 Why’s‖
Validate Your Initial Hypothesis:
• Assume perfect rationality — how should the business system behave?
• Look for analogies (other industries or problems)
• Imagine that you had perfect information — what would the ideal analysis look like?
Think outside the Box:
• Think about the problem from a different angle
• Talk to people who think differently
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14. What if your hypothesis is proven wrong?
You Win!
Hypothesis-driven thinking requires frequent reviews of the
prevailing and current hypotheses:
Do we still think they are right?
Are we making progress towards disproving them?
Are they at the right level of generality/predictiveness?
If proven wrong you’ve already made a big step towards
answering your question!
“A wise man sometimes changes his mind, but a fool never” - Arabic Proverb
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15. Another powerful tool to for hypothesis development is abduction—which
is a variation on deductive and inductive reasoning
1. Rule Rule If we put the price too
high, sales will go down
Case We have put prices too
Deduction 3. Result high
2. Case Result Therefore, sales will go
down
1. Case Case We have put prices up
Result Sales have gone down
Induction 3. Rule
Rule Sales have gone down
because the price is too
2. Result
high
1. Result Result Sales have gone down
Rule Sales go down when
prices are too high
Abduction 3. Case
Case Probably we have put
2. Rule prices too high
Hypothesis
Source: Barbara Minto, ―The Pyramid Principle‖.
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16. Exercise 1: Hypothesis Generation
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17. Exercise 1 — Disaggregate the problem into a diagnostic solution tree –
You Try!
?
Joey Smith goes
to the doctor ? ?
Physical
Head ? ?
Hurts ?
Mental
?
?
?
Source: Barbara Minto, ―The Pyramid Principle‖.
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