Persuasive problem solving in 7 steps CONFIDENTIAL AND PROPRIETARY Any use of this material without specific permission of McKinsey & Company is strictly prohibited Training session materials October 2011 Arendt Brinkmeyer Chesterton Chrysostom Dostoyevsky Foucauld Halimkesuma Kasimo Kennedy Newman Origen Soemohardjo Spaemann Tertullian Tolkien Weil A ntoine Bernard Chrysologus Clement Dietrich Friedrich Fulton Fyodor H a n n a h J o s é L e o n a r d L e w i s M i k h a i l o v i c h R o b e r t S i m o n e Executive page 1 Tuesday, October 11 Problem definition, structuring & prioritization Pak Haryanto’s speech Break-out Break Issue analyses Break-out Synthesis and recommendation development Break-out Wrap-up (learnings & feedback) Introduction & ice-breaker 8:00 – 8:15 8:15 – 8:45 8:45 – 9:00 9:00 – 10:00 10:00 – 10:15 10:15 – 10:30 10:30 – 11:15 11:15 – 11:30 11:30 – 12:30 12:30 – 13:00 Lunch 13:00 – 14:00 Problem Solving Techniques Workshop Agenda Antoine Bernard Chrysologus Clement Dietrich Friedrich Fulton Fyodor Hannah José Leonard Lewis Mikhailovich Robert Simone Amantius Athanasius Cantius Gaucherius Evagrius Fulgentius Ignatius Irenaeus Laurentius Nicasius Paschasius Pius Procopius Stephanus Turibius Vergilius Executive page 2 Tuesday, October 11 Problem definition, structuring & prioritization Pak Haryanto’s speech Break-out Break Issue analyses Break-out Synthesis and recommendation development Break-out Wrap-up (learnings & feedback) Introduction & ice-breaker 8:00 – 8:15 8:15 – 8:45 8:45 – 9:00 9:00 – 10:00 10:00 – 10:15 10:15 – 10:30 10:30 – 11:15 11:15 – 11:30 11:30 – 12:30 12:30 – 13:00 Lunch 13:00 – 14:00 Problem Solving Techniques Workshop Agenda Amantius Athanasius Cantius Gaucherius Evagrius Fulgentius Ignatius Irenaeus Laurentius Nicasius Paschasius Pius Procopius Stephanus Turibius Vergilius Arendt Brinkmeyer Chesterton Chrysostom Dostoyevsky Foucauld Halimkesuma Kasimo Kennedy Newman Origen Soemohardjo Spaemann Tertullian Tolkien Weil Executive page 3 Share with us... • Your name • 1 thing that no one in office knows about you • What do you expect to get out of this course Executive page 4 How can we make the programme a success? • Take responsibility for your own development • Be fully attentive (turn off mobile, SMS, Internet, daily routines) • Participate – make sessions interactive • Be open-minded – don’t fight the setting • If confused, ask openly: there are no stupid questions • This is a training environment – take some risk • Challenge assumptions – dare to think, “why not?” • Focus on ‘process’ rather than ‘answer’/’solution’ • Be open to test creative techniques – also when under pressure • Assign a rotating facilitator when working in groups. • Encourage all group members to participate Rules for the programme Rules for group work Executive page 5 Importance of good problem-solving, decision-making and communication • Get to answers faster • Use time and resources more efficiently • Have greater impact on the business • Free up time to do other things Executive page 6 The 7-step problem solving approach Problem Build a detailed work plan 4 1 Define the problem Break the problem into issues Prioritise issues 2 3 5 Conduct critical analyses Interpret findings and build argument Tell the story 6 7 Do it again! Executive page 7 Tuesday, October 11 Problem definition, structuring & prioritization Break-out Issue analyses Break-out Break Synthesis and recommendation development Break-out Wrap-up (learnings & feedback) 9:20 – 9:35 9:35 – 10:20 10:20 – 10:35 10:35 – 11:20 11:20 – 11:30 11:30 – 11:45 11:45 – 12:30 12:30 – 13:00 Lunch 13:00 – 14:00 Problem Solving Techniques Workshop Agenda Executive page 8 The 7-step problem solving approach Problem Build a detailed work plan 4 1 Define the problem Break the problem into issues Prioritise issues 2 3 5 Conduct critical analyses Interpret findings and build argument Tell the story 6 7 Do it again! Executive page 9 Problem statement S pecific: Characteristics of good problem statement M easurable: A ttainable: R elevant: T ime-bound: • Be precise with regards to what you want to achieve • Include a certain figure/amount reflecting a measurement of quality, quantity, cost, timeliness, or a combination of these • Ensure that people can be motivated to work towards the problem statement • Ensure that each person in their role can clearly contribute to achieving the overall target • Provide certain dates by which results need to happen. Ongoing expectations should specify how often • Thought-provoking (not factual) – Should intrigue and generate interest • Debatable (not statement/assertion) – No single obvious answer • Focused on what decision maker needs to move forward • Pointing towards necessary analysis Clear statement of problem to be solved Executive page 10 Examples of poor problem statements: Oilco refinery is losing money The Oilco refinery is suffering from poor profitability despite a strong market niche position Should the Oilco refinery improve its deteriorating position? Can the Oilco refinery be managed differently to increase profitability? Indisputable • The answer is obvious but does not address the problem of how to improve Too general • Closer to a problem statement but not actionable • Does not point towards the required analysis Statement of fact • Snap-shot of the situation • No question or hypothesis Executive page 11 Examples of good problem statements for the Oilco Refinery case What opportunities exist for Oilco to improve annual profitability by USD 40 million from 2007 on, through cost reductions and sustainable revenue increases? Oilco should shift to a low-cost local operator approach, cut overheads, redesign operations and restructure non-core assets to improve annual profitability by USD 40 million OR Significant and realistic • Identifies objectives that are valuable to the organisation • Points towards a complete set of analyses Hypothesis- driven Executive page 12 Problem definition worksheet Problem statement • The basic question Decision makers • Audience • Key decision maker Key forces acting on decision makers • Concerns and issues around the decision • How will you address conflicting agendas Boundaries and constraints • Time, capital, etc. Criteria for successful effort • “What does success look like”? Measures • Quantifiable target Key sources of insight • Where are we going to get the perspectives/input that we need to solve the problem? Accuracy • How accurate does the solution have to be Executive page 13 Problem definition example: Oilco Refinery case Problem statement • What opportunities exist for Oilco to improve annual profitability by USD 40 million from 2007 on, through cost reductions and sustainable revenue increases? Decision makers • CEO Oilco • President, Refinery Business • Oilco Board Boundaries and constraints • No solutions with greater than 18-month time frames • No solutions with big capital expenditure needs Key forces acting on decision makers CEO GM refinery • Difficult to get approval for other capital plans until refinery is under way • Political and community pressures for a high-employment, prominent refinery role • Own improvement plan is under way • Lack of competent people who can drive the improvement process Criteria for successful effort 1. Very significant improvement in refinery profitability 2. Lower capital expenditure plan 3. Clear set of actions developed to move forward 4. Clear definition of refinery strategic orientation (growth platform, low cost operator or other) Measures • Change in cash flow, profit (USD 30 million-40 million annually) • Return on investment • Cost taken out, capex reduced Accuracy • Strong directionality more important than detailed accuracy Key sources of insight • Insights from industry initiatives in recent years Executive page 14 The 7-step problem solving approach Problem Build a detailed work plan 4 1 Define the problem Break the problem into issues Prioritise issues 2 3 5 Conduct critical analyses Interpret findings and build argument Tell the story 6 7 Do it again! Executive page 15 What is a logic tree? Issue 3 Problem Issue 1 Issue 2 Issue 4 Issue 5 A problem solving tool that breaks a problem into discrete chunks with similar properties Executive page 16 Level of detail Logic trees answer specific questions at different levels of detail Question Idea 1 Idea 2 Idea 3 Idea 1.1 Idea 1.2 Idea 2.1 Idea 2.2 Idea 3.1 Idea 3.2 How / What? How / What? Problem definition Consistent M utually E xclusive C ollectively E xhaustive Formulation of the basic question to be resolved – should be as specific as possible Complete but non- overlapping list of conceivable solutions Further levels of detail for ideas, also complete and non- overlapping Executive page 17 Start building the logic tree “top down” – if stuck, try “bottom up” Question Idea 1 Idea 2 Idea 3 • Start with the overall question • Break it down into logical, MECE components • Work your way down the tree, identifying the issues you need to resolve to answer the question Top down Bottom up • Start with sub-issues, focusing on the most important • Group them into logical themes • Construct the tree backwards to the question • Check for “MECEness” and consistency Idea 2.1 Idea 2.2 Idea 3.1 Idea 3.2 ?? Question Executive page 18 Why use logic trees? • Sort out logic and conduct analyses • Set priorities • Divide and allocate work • Gain a common understanding within the team • Solving the parts will really solve the problem • Help focus on key frameworks and theories • Can even be used to structure (first) documents How Why Executive page 19 Alternative 1 Different approaches give different insights – don’t be afraid to try multiple angles before deciding How to have more money... Link logic tree to the character of the problem and try different approaches Alternative 2 Food Lodging Clothes Leisure activities Transportation Revenue Day shift Costs How to have more money...