Key Consulting Skill #1 Part 2 Framing Complex …faculty.msb.edu/homak/HomaHelpSite/webhelp/Content/FMC...typically end up solving the wrong problem.” Center for Creative Leadership

Key Consulting Skill #1 – Part 2

Framing Complex Problems SCQ Analysis [Situation-Complication-Question]

© K.E. Homa

Proprietary Material

Preliminary Discussion Draft Incomplete Without Extensive Oral Elaboration

Professor Ken Homa Georgetown University

5 Key Consulting Skills

1. Frame complex problems

2. Generate testable hypotheses

3. Gather and analyze facts efficiently

4. Craft creative, practical solutions

5. Syndicate support and mobilize



2. Generate testable hypotheses

3. Gather and analyze facts efficiently

4. Craft creative, practical solutions

5. Syndicate support and mobilize





• Grasp the context … quickly !

• Identify the key question

• Drill down to pivotal sub-issues

How to do it …






How to do it …

1. Frame complex problems – Key Question

“Some analysts go for the capillaries,

others go for the jugular.” Classic McKinsey diss

High praise …

“She’s like a laser cutting to the chase

and getting to the crux of the problem.” McKinsey high praise


“Some analysts go for the capillaries,

others go for the jugular.” Classic McKinsey diss

Einstein says …

“If I had one hour to solve a particularly

difficult problem, I would spend fifty-five

minutes defining the question and only five

minutes finding the solution.”


Peter Drucker says …

Albert Einstein

“The most serious mistakes are not being

made as a result of wrong answers.

The truly dangerous thing is asking the

wrong questions.”


Peter Drucker


So, how to determine the Key Question?

Start with the client …


Logical starting point is the client’s

statement of the core question …

But …

Issues “Funnel”

“Sometimes the question that is asked isn’t

the question that needs be answered.”


Said differently …



• Apparent issues … questions raised and thought to

be important … often they are only symptomatic

• Real issues …important questions that withstand

initial scrutiny … often diverse, scattered, unstructured,

redundant, secondary … need to be sorted, “cleaned”

and consolidated into big ideas

• Key (core) issues … the central questions from which

all other relevant questions emanate … they provide

analytical focus and efficiency


Issues “Funnel”

Biz managers …

Every consultant faces the temptation of taking the

client’s diagnosis of his problem at face value.

Resist this temptation.

Just as a patient is not always aware of the meaning of

his symptoms, so are managers sometimes incorrect

in their diagnoses of what ails their organizations.




McKinsey Mind

Why?

“Managers faced with a complex problem

typically end up solving the wrong problem.” Center for Creative Leadership



the question that needs be answered.” Inverse to exam-taking



Remedies?

• Wandering in a foreign land

• “Tunnel vision” hides periphery

• “Noise” obscures the “signal”

• Unconscious biases take over

• Preference for simpler problems

Frequent Stumbling Blocks




• Draw from familiar analogies

• Expand horizon, diversify team

• Clear clutter, structure problem

• Stay focused and be objective

• Break into smaller problems

Comes with practice and experience …

• Wandering in a foreign land

• “Tunnel vision” hides periphery

• “Noise: obscures “signal”

• Unconscious biases take over

• Preference for simpler problems

Frequent Stumbling Blocks Some Remedies…


There are some methods

and tricks of the trade …

Start with a broad definition of the problem, then

narrow it down to a very specific problem with clear

phrasing of the question to be addressed, the data

to be applied to it, and the possible outcomes.


General Principle

Good News

Though variants abound, the number of

core business problems is not infinite.


Good News

More specifically …

Though variants abound, the number of

core business problems is not infinite.

The overarching conceptual structure of

most business problems is the same …


More Good News

PAR

Potential Action Results + =

The PAR Framework is one of the overarching

conceptual structures for business problems …

© K.E. Homa

• Profitability is the “R” in virtually all cases




© K.E. Homa


• Entry point and analytical direction varies …

P > A > R P < A > R P < A < R




© K.E. Homa



P > A > R P < A > R P < A < R


Why are profits down?



© K.E. Homa



P > A > R P < A > R P < A < R


Why are profits down? How to respond?



© K.E. Homa



P > A > R P < A > R P < A < R


Why are profits down? How to respond? Worth the effort?



© K.E. Homa

There’s a facilitating protocol that consultants

often use for defining the problem and for

determining the Key Question …


Still More Good News

A facilitating tool for problem

definition is SCQ Analysis:

Situation, Complication, Question

• Sometimes pronounced “seek analysis”

• Derived from basic story writing method

• Popularized by Pyramid Principle author

Barbara Minto (McKinsey)

A facilitating tool for problem

definition is SCQ Analysis:

Situation, Complication, Question

Minto, Pyramid Principle

Typical Format

Details

• Contextual … sets the study’s backdrop

• Self-sufficient … a standalone summary

• Fact-based … multi-sourced, verified

• Incontrovertible … elicits broad agreement

• Non-problematic … sets-up the Complication

Situation Complication Question

• Completes the case’s context

(by adding a dose of tension)

• Summarizes the disruption to the

status quo or the need for change

• Isolates a single key factor or dynamic

(which is often a “Disturbing Event”)



“A Disturbing Event is what happens -- or what

could happen or what would be likely to happen --

in the near or far future -- to threaten the relatively

stable situation described in the Situation, and

thus, to potentially trigger an undesired result.”



A Disturbing Event can be …

• External: a change initiated elsewhere in the environment

within which the structure/process takes place, e.g.

– Emergence of a new competitor

– Conversion to a new technology

– Shift in government or customer policy








• Internal: a change initiated by the company, e.g.

– Revised a business process

– Expanded into a new market

– Repositioned the product line








• Internal: a change initiated by the company, e.g.

– Revised a business process

– Expanded into a new market

– Repositioned the product line

• Metrics-revealed: an evident need for change, e.g.

– Sub-par operating results

– Ineffective policy or process

– Shifting customer attitudes.


As in Jeopardy, always state your

answer in the form of a question…

The SCQ’s Complication (or Disturbing

Event) tees-up a case’s pivotal Question …

• Captures the scope & essence of the case

• Logically follows from the context established

by the Situation and Complication

• Requires validation as the “right” question

… type, subject, scope, impact

• Subject to iterative restatement for clarification

or redirection … i.e. getting the question right


Some generic questions often get asked:

• Why isn’t what we are doing working?

• In this situation, what should we do?

• Should we do what we’re considering?

• How should we do what we’re considering?


A question about the Question:

Is it the right one?

Pitfalls, tests, restatements …



• Beware of common pitfalls

General Principles

Common pitfalls in defining problems

1. No focus -- definition is too vague or broad.

Example: What should we do about climate change?

2. Focus is misdirected -- definition is too narrow.

Example: How to improve battery life in hybrid cars?

Maybe the answer is hydrogen fueled vehicles.

3. Statement is assumption-driven.

Example: How to make potential customers more

aware of our products’ advantages?

Maybe they are aware and don’t value the benefits.

4. Statement is solution-driven.

Example: How to expand the parking lot to fit more cars?

Maybe the answer is to demotivate people from driving to work.

Adapted from Thinkers Toolkit




• Test the Question’s “integrity”

General Principles

Test: Have you framed the problem well?

1. Defined a specific problem or opportunity?

2. Stated in clear, unambiguous way?

3. Verified basic facts & assumptions?

4. Leveraged prior studies & findings?

5. Considered alternative formulations?

6. Corrected for cognitive biases?

7. Stress-tested with experts?

8. Validated resonance with stakeholders?

9. Drilled down to relevant sub-issues?

10. Confident that answering will make a difference?

Adapted from Davenport & Kim,

Keeping Up with the Quants:

HBR Press, 2013





• Keep restating the Question

until it is the right one!

General Principles

• Challenge pivotal assumptions

• Approach from different angles e.g. ops problem or marketing problem?

• Adopt alternative perspectives

e.g. customer view, investor view

• Zoom out …to see the bigger picture

• Zoom in … on specifics and details

• Reverse the Problem … how not to?

Restate the question by reframing the problem.

For more reframing ‘nudges’, see “Einstein’s Secrets”

http://litemind.com/problem-definition





• Keep restating the Question

until it is the right one!

General Principles

Putting the SCQ into context …

The pivotal case Question from the SCQ Analysis

is a direct linkage to, and the starting point for,

the Key Issues Analysis (KIA) …

Key

Question

Analytical Process Map

© K.E. Homa 2013

The Key Issues Analysis (KIA) is often the

basis for clarifying or redirecting the SCQ’s

pivotal case question …

Key

Question

Sub-Issues

Problem

Restatement

Analytical Process Map

© K.E. Homa 2013






How to do it …

Continued in Part 3 - Issues Analysis & Logic Trees

Key Consulting Skill #1 – Part 2

Framing Complex Problems SCQ Analysis [Situation-Complication-Question]

© K.E. Homa

Proprietary Material

Preliminary Discussion Draft Incomplete Without Extensive Oral Elaboration

Professor Ken Homa Georgetown University

Documents

Key Consulting Skill #1 Part 2 Framing Complex …faculty.msb.edu/homak/HomaHelpSite/webhelp/Content/FMC...typically end up solving the wrong problem.” Center for Creative Leadership