Issue-Based Work Planning and Hypothesis Problem

Solving

2

Issues, rather than tasks or analysis, drive the process

INTRO

Problem Definition

Issue Tree Creation

Hypothesis Generation

Defining Analysis and Identifying Data Sources

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3

An Issue-Based Work Planning is developed in five Steps

INTRO

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4

The Situation and Complication set the stage for the Overriding Question

DEFINE THE PROBLEM 1

Overriding Question

Situation

Complication

• ...

• But ...• Meanwhile, ...

• ... ?

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5

Starting from the overriding question, develop an issue tree

DEVELOP AN ISSUE TREE

Can US Utility keep control of its future into the medium term?

Overriding Question

First Level Issue — Example

Can US Utility salvage its share price?

Are there ways of avoiding being taken over if share price

cannot be salvaged?

2

Brainstorm first level issues and chart them on an issue tree

Issues and sub-issues should • Relate directly to the overriding

question • Fall within the scope of the overriding

question• Be mutually exclusive and

collectively exhaustive (MECE)

Example

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6

There are three generic types of issue trees that could be constructed

DEVELOP AN ISSUE TREE

Starts with problem definition and divides it into components

Description

Actions, assertions, questions,

categories

Elements in splits

Early on, when you don't know much

When to Use

Deductive

Postulates a hypothesis and

develops a necessary and

sufficient rationale to validate or

disprove it

Reasons/questions At any point in the process

Hypothesis driven

Phrases key issues so that they can be

answered yes or no, and sequence them in a logical

order showing the depending action

Questions Use issue maps to frame options,

usually later in the process

Issue Map

What/how

Reasons

?

Yes

No

2

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7

Repeat the exercise to brainstorm second level issues

DEVELOP AN ISSUE TREE

Can US Utility keep control of its future into

the medium term?

Overriding Question

First Level Issue

Can US Utility salvage its share

price?

Can US Utility create growth

options?

Can US Utility avoid being taken

over?

Can US Utility beat the cost base agreed with the Regulator?

Second Level Issues

Can US Utility divest and refocus?

Can US Utility grow organically?

Can US Utility grow by acquisition?

Can US Utility build scale quickly?

2

Example

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8

First Level Hypotheses - Impact on company’s share price would be:

First Level Issues

Second Level Issues

Use simple hypotheses to prune the issue tree

DEVELOP AN ISSUE TREE

Medium (regulator would respond after a delay)

Medium (the company could divest several divisions)

Large (Investors seek a credible US player in this sector)

Low (The company has shown low ability to handle acquisitions)

Medium (The company has shown some ability to grow organically)

Can it beat the cost base it has agreed with the regulator?

Can US Utility keep control of its future

into the medium term?

Can US Utility salvage its

share price?

Can US Utility avoid being taken over?

Can it grow by acquisition?

Can it build scale quickly?

Can it secure a place in the post-

consolidation industry line-up?

Can it convince investors?

Can it divest and refocus?

Can US Utility create growth

options?

Medium (The industry is predicted to find a stable equilibrium)

Are there targets to pursue?

Negative (Research warns of over-payment for targets; few opportunities)

2

Example

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9

Think about issue analysis as drilling for oil

DEVELOP AN ISSUE TREE

Surface Drilling

• Average effort

• Surface knowledge

• Fails to capture the deeper insights

• Heavy effort

• Time consuming

• Excess knowledge

• Blind alleys

• Much wasted effort

• Optimal effort

• Economy of knowledge

• Expertise

• Highest return on investment

Deep Drilling Informed Exploration

Impact of Pruning

2

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10

Good hypotheses measure up against the criteria

GENERATE HYPOTHESES

Is This Better?

• Does it address a single issue

• Is this an educated guess at the answer, or conclusion

• Is it testable: Can we prove or disprove it?

• Is it useful: Will it help solve the problem?

• Is it comprehensive: Have we covered all the angles?

The company can increase operational efficiency by 10% by

improving its purchasing practices

Third Level Issue

Hypothesis

Can the Utility

increase operational efficiency?

3

Example

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11

Specific Questions for Analysis

• What trends in operational efficiency are already present?

• What is the purchasing spend today?• What have been the recent trends in this?• What opportunities do e-auctions offer?• Would purchasing changes impact on quality?• Could new suppliers integrate with the other key

organisational initiative?

Can the Utility increase

operational efficiency?

The company can increase operational efficiency by 10% by

improving its purchasing practices

Third Level Issue

Hypothesis

Define the specific analysis needed to prove or disprove the hypothesis – analysis should seek to answer a very specific question

DEFINE ANALYSES AND DATA SOURCES 4

Example

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12

Data collection matrix and data collection grid - examples

DEFINE ANALYSES AND DATA SOURCES

Planning: Example of data collection grid

4

Example

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13

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