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Structure problem solving
- 2. When and Why INTRODUCTION 1 WHEN do we use a structured problem solving approach? • For important issues where there is a big win – it’s time consuming • For complex issues with lots of drivers/causes WHY do we use a structured problem solving approach • Comprehensive and starts with big picture • Creates a common framework for discussion and debate • Makes assumptions explict • Data driven (or highlights where data is missing) and helps design reserach • Helps identify risk and focus efforts 2 2 WHEN AND WHY TO USE A STRUCTURED PROBLEM SOLVING APPROACH
- 3. How: Problem Definition Sheet INTRODUCTION BASIC QUESTION TO BE RESOLVED Defined in a SMART manner: Specific, Measureable, Action-oriented, Relevant, Time-bound CONTEXT Overall situation in which question is being asked. e.g. industry trends, relative position in industry CRITERIA FOR SUCCESS Defines what a good outcome looks like. Must be shared by all stakeholders e.g. value of outcome and timing of value realisation SCOPE & CONSTRAINTS Defines the limits of the solution space e.g. fixed amount of investment, existing headcount, European markets STAKEHOLDERS Who has a vested interest in this decision and will be affected by it. e.g. CEO, functional heads, team members, customers
- 4. How: Being MECE PRINCIPLE 1: BEING “MECE” A well-structured set of solutions is Mutually Exclusive and Collectively Exhaustive (“MECE”) NOT MECE FRESH PRODUCE Apples Bananas Carrots NOT MECE MECE FRESH PRODUCE Fruit Veg 1 2 3 FRESH PRODUCE With seeds Green Sour INTRODUCTION
- 5. How: Hierarchy PRINCIPLE 2: RESPECTING HIERARCHY A well-structured set of drivers/solutions is Mutually Exclusive and Collectively Exhaustive (“MECE”) WITHOUT HIERARCHY FRESH PRODUCE Apples Bananas Carrots WITH HIERARCHY 1 2 FRESH PRODUCE Fruit Veg Everyday Exotic Salad Root Non Salad Non Root INTRODUCTION
- 6. Build an Issue Tree ISSUE TREES Issue trees provide a list of all reasons, grouped in meaningful ways. WHY IS ACME SAAS REVENUE DOWN FOR JUL (vs. JUN)? Is Revenue down from OUTBOUND SALES? Is Revenue down from INBOUND SALES? Is Revenue down from PARTNERS? Is Revenue down from NEW CUSTOMERS? Is Revenue down from EXISTING CUSTOMERS? Is Revenue down from UPSELLING? Is Revenue down from X-SELLING? # WEBSITE VISITS X % REGISTRATION X % CONVERSION FROM REGISTERED REVENUE FROM PARTNERS # CALLS X % CONVERSION UPSELLING REVENUE PER CUSTOMER X # EXISTING CUSTOMERS X-SELLING REVENUE PER CUSTOMER X # EXISTING CUSTOMERS Run campaign to tell customers about other products Spend more time with existing customers Meet problem partners Improve website UXPotential salespeople attrition – provide training ISSUE TREE
- 7. Exercise: Issue Tree WHY IS YOUR CINEMA MAKING LESS MONEY? WHY IS REVENUE DOWN FOR THIS MONTH AT ODEON CINEMA LEICESTER SQUARE? ISSUE TREE
- 8. Build a Hypothesis Tree HYPOTHESIS TREES Hypothesis Trees provide a list of “what you need to believe is true” for the statement to make sense WE (GRAZE.COM) SHOULD LAUNCH A CHEESE TOASTIE KIT CHEESE TOASTIES ARE A GOOD BRAND FIT THERE IS A BIG MARKET FOR CHEESE TOASTIES THE MARKET IS GROWING THE UNIT ECONOMICS ARE GOOD WE HAVE THE OPERATIONAL CAPABILITY X CT SOLD/YEAR Y SNACKS SOLD/YEAR X Z% CT PENETRATION - OUR CUSTOMERS DO NOT DISLIKE CT - OUR CUSTOMERS LIKE CT £Z/CT KIT LESS COST/CT KIT (fixed and variable) -MIN. OPERATIONAL CHANGES NEEDED TO MAKE CT KITS - MIN. OPERATIANL CHANGES NEEDED TO MAIL CT KITS Identify risks to make decisions and develop risk mitigation strategies. HYPOTHESIS TREE WE BELIEVE THE OPPORTUNITY IS LARGE WE BELIEVE WE CAN SEIZE THE OPPORTUNITY
- 9. Exercise: Hypothesis Tree SHOULD YOU (BROMPTON BIKES) ENTER THE FRANCE MARKET NEXT? (AFTER UK) WE SHOULD ENTER FRANCE NEXT, AFTER THE UK HYPOTHESIS TREE
- 10. Exercise: Issue Tree (answer) WHY IS YOUR CINEMA MAKING LESS MONEY? WHY IS REVENUE DOWN FOR THIS MONTH AT ODEON CINEMA LEICESTER SQUARE? Is Revenue down from TICKET SALES? Is Revenue down from FOOD AND BEVERAGE? Is Revenue from the movie-goer down? Is Ancillary Revenue down? Is Revenue down from ADVERTISING? # TICKETS X AVG. F&B SPEND # SAME DAY TICKETS X PRICE/SAME DAY TICKET + # ADVANCE TICKETS X PRICE/ADVANCE TICKET FEES/SCREENING X # TOTAL SCREENINGS X % UTILISATION # CORPORATE EVENTS X FEES / EVENT Run campaign to add more corporate events Run campaign to increase utilization Change price or film mix to increase tickets sold ISSUE TREE Is Revenue down from EVENTS? Change mix of F&B options to higher priced items
- 11. Exercise: Hypothesis Tree (Answer) SHOULD YOU (BROMPTON BIKES) ENTER THE FRANCE MARKET NEXT? (AFTER UK) WE SHOULD ENTER FRANCE NEXT, AFTER THE UK THERE IS A BIG MARKET FOR BIKES BIKE MARKET IS GROWING BROMPTON BIKE PENETRATION WILL INCREASE REGULATORY ENVIRONMENT IS FAVOURABLE WE HAVE THE OPERATIONAL CAPAIBILITY Y% POP. GROWTH AND/OR Z% MORE BIKES/PER PERSON COMPARE VS. UK - X% BROMPTON BIKE PENETRATION (VS. UK) - QUALITY OF COMP. IS LOW X BIKES SOLD/YEAR COMPARE VS. UK THERE IS NO ADDITIONAL REGULATORY REQUIREMENTS ON PRODUCT-SIDE -WE HAVE ACCESS TO DISTRIBUTION NETWORK IN FRANCE - SHIPPING FROM UK IS NOT COST PROHIBITIVE Identify risks to make decisions and develop risk mitigation strategies. HYPOTHESIS TREE WE BELIEVE THE OPPORTUNITY IS LARGE WE BELIEVE WE CAN SEIZE THE OPPORTUNITY
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