Project Skills Workshops Framing the Problem

1
Project Skills WorkshopsFraming the Problem

• Instructors
• Douglas Dow Integrative Projects
• Terry Atkinson Integrative Projects
• Selwyn DSouza Managing New Ventures
• 21 November 2003

2
Agenda

• Introductions Administration 15 mins
• Framing the Problem 60
• The Magic Number Seven
• MECE
• Deductive logic
• Inductive logic
• Scientific method
• Approaches to building a pyramid
• Practical hints
• In-class Exercise No. 1 30
• In-class Exercise No. 2 30
• Exercise for Next Week 5

3
The Instructors

• Douglas Dow (Integrative Projects)
• Assoc Prof in Business Strategy at MBS
• Former Senior Manager BCG (Melbourne,
  1985-1990)
• Terry Atkinson (Integrative Projects)
• Senior Fellow of the MBS alumnus (MBA 1987)
• Former Vice-President BCG (Melbourne,
  1990-2003)
• Selwyn DSouza (Managing New Ventures)
• Senior Fellow of the MBS alumnus (MBA 1995)
• Director of XCapital Group (private equity)
• Founder of CFM (subsequently sold to a large
  global telecommunications company)
• Former consultant with Australian Consulting
  Partners

4
How the two subjects fit together
5
Timeline for these workshopsTerm 3, 2003
6
Timeline for Integrative Projects Term 1, 2004
7
Timeline for Managing New Ventures Term 1, 2004
8
A related administrative issue

• Selecting syndicates
• We require your syndicate preference forms by the
  end of tonight
• The syndicate allocations will be available
  Monday before class
• Selecting topics
• We require your topic preference forms by the end
  of the session next Friday
• The topics will be allocated by the following
  Monday

9
The structure of these workshops
10
Framing the problem

• We are going to force you to spend a lot more
  time on this than normal
• Management problems are frequently very complex
• Examples
• Our duty of care
• There is significant value in decomposing
  problems into a logical structure

11
Examples of logical structuring of issues
Source Pirsig, Zen and the Art of Motorcycle
Maintenance, 1974, p103
12
Examples of logical structuring of issues
Through better technology?
Higher price realisation?
Through a stronger brand?
Can Phoenix become more profitable in solar hot
water?
In manufacturing?
Lower unit costs?
In distribution?
In marketing?
Source BCG 1998, Training manual
13
The benefits of logically structuring issues

• Easier to test confirm the elements
• Helps uncover implicit assumptions
• Lowers the risk of missing key issues
• Saves time
• Results in a more convincing case

14
There are two key elements

• Pyramidal logic / logical structuring
• Also called a logic tree, or issue tree
• Breaking the problem into a hierarchy of issues
  and evidence
• Is a natural approach to dealing with complexity
• Scientific Method
• A hypothesis-driven, fact-based approach to
  resolving the sub-issues

15
Consider this shopping list

• Milk
• Potatoes
• Grapes
• Eggs
• Carrots
• Oranges
• Butter
• Apples
• Sour cream

16
Can you remember them all ?
17
I guarantee, most people will remember them
better if they are present this way
18
Two things are going on here

• The Magical Number Seven, Plus or Minus Two
  (George Miller, The
  Psychology of Communication, 1967)
• An imposition of logical relationships

19
There are three key building blocks to a logic
tree

• MECE disaggregations
• Deductive Logic
• Inductive Logic

20
MECE disaggregations

• are about breaking an idea, concept, or
  phenomena into smaller more manageable pieces
• MECE stands for
• Mutually Exclusive
• Collectively Exhaustive

21
Deductive logical arguments

• Two or more hypotheses are linked together in a
  chain of logic
• to create a new hypothesis, or
• predict an event
• A key feature of this form of logic is that, if
  all the elements are supported, then the
  resulting hypothesis is proven

Various people substitute different terms such
as general truths (Persig), ideas, and
assertions.
22
A simple example of deductive logic
The if, and and thuss are typically left
off.
23
A more managerial example of deductive logic
FMCG Fast Moving Consumer Goods (e.g.
cereals, snack foods, detergents)
24
Inductive logical arguments

• Two or more observations are grouped together to
  imply that a hypothesis is likely to be true
• The key features of this form of logic are
• Each observation is consistent with, but not
  absolute proof of, the over-riding hypothesis
• Refuting one observation may weaken the overall
  argument, but does not falsify it

25
A managerial example of inductive logic
26
Some general comments about pyramidal logic

• Each tier within a pyramid has a unique
  conceptual theme
• The ordering of items within a branch should
  also follow a logical pattern

27
Scientific Method

• Now that we have broken the problem into more
  manageable chunks
• we need to rigorously test the assertions /
  hypotheses

28
Solve the problem at the first meeting

• Dont mistake this mantra for arrogance
• It is about being both
• HYPOTHESIS-DRIVEN
  
  FACT-BASED

29
Approaches to building a pyramid

• The Top-Down Approach
• The Bottom-Up Approach
• Then merge the two

30
The Top-Down Approach

• Begin with the initial problem (or, a
  hypothetical solution to that problem)
• How would you convince a sceptical audience?
• Work down the pyramid imagining how you would
  prove each point

31
The Bottom-Up Approach

• Write down all the facts and arguments that you
  ( others) feel are important (the de Bono
  Red Hat gut feel)
• Begin to identify how they relate to one another
• Start to fill in the gaps

32
Some practical hints

• Use large pieces of paper (A3) or white boards
• Pyramids can get large complex very quickly
• Spreading them across multiple page makes it hard
  to see the overall picture
• For the bottom-up approach I put each fact or
  idea on
• business cards / index cards, or
• cells in an Excel spreadsheet
• That makes it easier to rearrange chunks of the
  logic

33
Some brainstorming rules

• Come prepared (know the background and basic
  facts)
• Check your preconceptions at the door
• No ideas are bad
• No questions are dumb
• But, know when to stop
• Record your ideas
• Then change hats, and start testing the
  emerging hypotheses

34
Beware The problem is not always the problem

• The problem, as initially stated,
• is often only a symptom, and
• frequently is biased to a particular solution
• Spend time upfront questioning the question

35
Dont reinvent the wheel

• There are sequences of logic that appear in
  numerous problems
• You need to manage a balancing act
• Not reinventing the wheel
  while
  
  Not forcing every problem into
  the same solution
• A generic framework should be a starting point,
  not the final solution

36
A big cautionary note

• There is never one unique and perfect pyramid for
  any problem
• BUT
• Some pyramids are fatally flawed
• Others may not be as efficient

37
Now lets try the Whitecane exercise

• Gather into groups of 3
• Take 20 minutes to develop a pyramid based on the
  facts provided
• Limit yourselves mainly to the assertions
  supplied
• You may want to add intermediate thoughts, and
• Possibly break up some of the paragraphs, but
• Those are the facts you have to deal with
• When you return, be prepared to present your
  pyramid

38
A second exercise PaperCo

• Gather into your groups of 3 again
• Take another 20 minutes to develop a pyramid
  based on the facts provided
• The same instructions apply
• You may want to add intermediate thoughts, and
• Possibly break up some of the paragraphs, but
• Those are the facts you have to deal with
• When you return, be prepared to present your
  pyramid

39
Your preparation for next week

• Again in your groups of 3, consider the merger
  between the MBS and the Mt Eliza Business School
• Develop a pyramid to address the question of
  whether the merger should proceed
• Be prepared to present your work next Monday