Framing Complex Problem Part 3

Professor Ken Homa
Georgetown University
Key Consulting Skill #1 – Part 3

Framing Complex Problems
Issues Analysis & Logic Trees
Preliminary Discussion Draft

Incomplete Without Extensive Oral Elaboration
Proprietary Material
© K.E. Homa
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



How to do it …
• Grasp the context … quickly !
• Identify the key question
• Drill down to pivotal sub-issues

How to do it …

1. Frame complex problems – Issues
Some General Principles …

General Principle – Issue Analysis

When confronted with a complex, hard-to-solve
problem, break it down into a structured set of
simpler, easier-to-solve questions.

Generally called “decomposing a problem”.


Consultants call this process “issue analysis”.


Consultants call this process “issue analysis”.
An issue analysis identifies the specific questions

that need to be resolved to answer the case’s key
question (from the SCQ Analysis)*
* For details, see: Framing Complex Problems Part 2 - SCQ Analysis

General Principle – Parallel Structure

When drilling down, consultants try to define
issues at a parallel level of abstraction.

That is, start at a high, panoramic level of

abstraction across the entirety of a problem…
… and then go progressively deeper and get
more granular across all pivotal issues.

That is, start at a high, panoramic level of

abstraction across the entirety of a problem…
… and then go progressively deeper and get
more granular across all pivotal issues.
The process is called “analytical zooming”

(also called “zooming in” or “drilling down”)
General Process – Analytical Zooming

Start at a high level of abstraction, then get
progressively more granular
Keep thinking at the same level of granularity

across all issues, i.e. maintain a parallel
structure
Eventually, go as deep into the details as is

necessary for the most pivotal issues
Analytical Zooming
Some Analogies
Google Maps Ocean View Ocean Exploration
1. State 1. Panorama 1. Fly over in an airplane
2. City 2. Area 2. Hover in a helicopter
3. Block 3. Surface 3. Skim surface in a boat
4. Street 4. Shallow water 4. Submerge … snorkel
5. House 5. Deep water 5. Dive deep … scuba
6. Room 6. Ocean bottom 6. View bottom w/ submarine
7. Chair 7. Sub-strata 7. Penetrate with drill

General Principle - MECE

In consultant-speak, the set of identified issues (or
sub-issues) should be MECE … mutually exclusive
(no overlaps) and collectively exhaustive (no
omissions).

omissions).
That is, there should be no redundancies that might

result in duplicated analytical effort …

omissions).
That is, there should be no redundancies that might

result in duplicated analytical effort …
… and, the set of issues should be sufficiently

comprehensive that answering them do, in fact,
answer the bigger question.
An alternative to MECE …
MECE
Oft repeated consulting mantra.
MECE
Mutually Exclusive
No overlaps
MECE
Mutually Exclusive Collectively Exhaustive
No overlaps No omissions
Consider a more practical,
more real world variant …
MECE
MICS
MICS
Mutually Independent
MICS
Minimized overlaps
Think: analytical tasks

MICS
Minimized overlaps
Assign “chunks” of work with

no duplicated (wasted) effort.
MICS
Mutually Independent Collectively Sufficient
Minimized overlaps

MICS
Mutually Independent Collectively Sufficient
Minimized overlaps If these questions are answered,

will the key question, in fact, be
Think: analytical tasks answered?
Warning
• MECE is common consulting jargon
• MICS is a “Homa-ism’ that reflects

personal observations
• Both ME vs. MI and CE vs. CS are

conceptually debatable :
– “Doesn’t MI tolerate overlap among issues?”
Answer: Yes -- but it’s impossible to eliminate all overlaps
– “Doesn’t CS allow some issues to be ignored?”

Answer: Yes -- but only ones that don’t matter
Bottom line: It’s practical to think MICS, but

always speak MECE (especially in interviews)
Summary: Key Concepts …

Key Concepts
• Issues Analysis … break a complex problem into a related

set of simpler questions (i.e. decompose the problem)
• Analytical Zooming (a.k.a. “drilling down”, “zooming in”)

start at a high level of abstraction, then get progressively
more granular across the range of identified issues
• Parallel Structure … think about issues at the same level

of abstraction until pivotal issues are identified … then go as
deep as necessary on them
• MECE … identify issues that are mutually exclusive (no

overlaps) and collectively exhaustive (no omissions).
So, how to do an Issues Analysis?

A fundamental analytical method:

The 5 Whys
Analytical Method - The 5 Whys
• Generally credited to Toyota … part of their industry-leading

Total Quality (later 6-Sigma) initiatives

• A sequential question-asking technique used to drill down

on the cause-and-effect relationships underlying a particular
problem.


problem.
• Simply stated: Keep asking “why?” until the stream of

thinking is exhausted … then ask “why?” one more time.


problem.

• Conventional wisdom is that 5 is the magic number of

drill-downs typically required to get to the root of a complex
problem.
Examples =>
Analytical Method - The 5 Whys - Example
Problem: The car won’t start.
Why? - The battery is dead.

Why? - The alternator is not functioning.
Why? - The alternator belt has broken.
Why? - The alternator belt was well beyond its
useful service life and not replaced.
Why? - The vehicle was not maintained according
to the recommended service schedule.
Why? - Replacement parts are not available because
the car is too old (root cause)
Solution - Find a creative source for replacement parts.

Salvage from junk yard? Make one? Work-around?
Source

Source Karn Bulsuk

© Karn G. Bulsuk click for a detailed walk-thru of this example

The 5 Whys – Analytical Tools …

Method: Spreadsheet Tables

Analytical Method - The 5 Whys - Tools
5 Whys Spreadsheet
• Detailed Walk-thru of prior example
Discussion Spreadsheet
• Excel Template for doing a 5 Whys

Spreadsheet
© Karn G. Bulsuk
Method: Fishbone Diagram

Analytical Method – Fishbone Diagram
• Originally developed by Kaoru Ishikawa to visualize the

causes of a specific problem
• Sometimes called an Ishikawa or Cause & Effect Diagram
• Used to examine why something happened or might
happen by breaking an issue into smaller, more easily
understandable categories.
• In essence, a visual representation of a 5 Whys Analysis
• Called Fishbone Diagrams because a completed diagram
ends up looking like a fish's skeleton
click for a walk-thru of
the Fishbone methodology Example =>
Analytical Method - The 5 Whys - Tools

5 Whys Fishbone
click for a walk-thru

of this example
Enlarged view =>

© Karn G. Bulsuk
5 Whys – Fishbone Diagram
Summary: 5 Whys & Fishbone Diagrams

• An sequential question-asking technique used to drill

down on the cause-and-effect relationships underlying a
particular problem.

particular problem.


particular problem.

• Two main analytical devices to facilitate:

– Spreadsheet Tables
– Fishbone Charts
Analytical Method: Logic Trees

Analytical Method – Logic Trees
• Logic Trees are close cousins to Fishbone diagrams

… sometimes called Issue Trees or ROI Trees.
• Logic Trees are foundational to consulting:

“The most common tool McKinsey-ites use to break problems apart is the
logic tree, a hierarchical listing of all the components of a problem, starting
at the “20,000-foot view” and moving progressively downward.”
McKinsey Mind
• Sometimes, logic trees are explicitly documented in

writing or digitally … other times, they are just part of a
consultant’s mindset.
• Front-end of the problem solving process
• Systematic drill down from an “aggregate”

Visual depiction of text outlines … with analytical rules
• Key factors, components & relationships

Structuring Options: Parts, Cause & Effect, Groups
• Many variations … and permutations

Descriptive …. what?
Diagnostic ..… why?
Prescriptive … how?
When using logic trees, the trick is finding

or crafting one that is applicable to the
specific situation …
The quintessential logic tree

is the ROI-Profitability Tree …
Analytical Method – ROI Trees
• Useful for analytically dissecting profitability
• Isolates key variables and specifies links
• Provides framework for financial modeling
• Many variations and permutations *
• Again, the trick is finding or crafting one that is

applicable to the specific situation
* See FMC Toolkit: ROI Trees for

more information & examples Basic ROI Tree=>
Basic ROI Tree
Price
Revenue
Volume
Profit
Variable
Cost
Var.Cost
Cost
ROI Per Unit
Fixed Capacity
Cost
Investment
Some variants of the
basic ROI Tree…
ROI Tree Example
Profit Improvement
Which
Product How? How? How?
Lines?
From Decrease
Widgets raw
material
How can Increase costs
Acme Revenues
increase Negotiate wage concessions
From
profits from
Thrummats
existing Decrease
Decrease Negotiate higher productivity
business labor
Expenses quotas
lines? costs
Implement a labor-saving
From
production process
Grommets Decrease
overhead
costs
Source: McKinsey Mind

ROI Tree Example
Profit Improvement
Which
Lines?
From Decrease
Widgets raw
material
Acme Revenues
From
profits from
Thrummats
existing Decrease
business labor
Expenses quotas
lines? costs
From
production process
Grommets Decrease
overhead
costs

ROI Tree Example
Profit Improvement
Which
Lines?
From Decrease
Widgets raw
material
Acme Revenues
From
profits from
Thrummats
existing Decrease
business labor
Expenses quotas
lines? costs
From
production process
Grommets Decrease
overhead
costs

ROI Tree Example
Profit Improvement
Which
Lines?
From Decrease
Widgets raw
material
Acme Revenues
From
profits from
Thrummats
existing Decrease
business labor
Expenses quotas
lines? costs
From
production process
Grommets Decrease
overhead
costs

Let’s personalize an ROI Tree
to be sure it hits home…
Issue Tree Example
Saving Money
How? How? How? How?
Inherit
Legally ...
Receive a
windfall Win lottery
Illegally Overtime
Increase Receive more $
income from investments Work more
hours Additional job
Receive more $
How can I have from work Higher
Make more
more money per hour job level
at the end of each
month without Pay less for Better paid
incurring a debt? same amount Buy lower industry
of items quality items
Reduce Shop around
expenses for specials
Buy less • Food

• Clothing
• Utensils
• Entertainment
• Travel
• Other
Issue Tree Example
Saving Money
How? How? How? How?
Inherit
Legally ...
Receive a
Illegally Overtime
Receive more $
Make more
at the end of each
Reduce Shop around
Buy less • Food

• Clothing
• Utensils
• Entertainment
• Travel
• Other
Issue Tree Example
Saving Money
How? How? How? How?
Inherit
Legally ...
Receive a
Illegally Overtime
Receive more $
Make more
at the end of each
Reduce Shop around
Buy less • Food

• Clothing
• Utensils
• Entertainment
• Travel
• Other
Issue Tree Example
Saving Money
How? How? How? How?
Inherit
Legally ...
Receive a
Illegally Overtime
Receive more $
Make more
at the end of each
Reduce Shop around
Buy less • Food

• Clothing
• Utensils
• Entertainment
• Travel
• Other
Issue Tree Example
Saving Money
How? How? How? How?
Inherit
Legally ...
Receive a
Illegally Overtime
Receive more $
Make more
at the end of each
Reduce Shop around
Buy less • Food

• Clothing
• Utensils
• Entertainment
• Travel
• Other
Issue Tree Example
Saving Money
How? How? How? How?
Inherit
Legally ...
Receive a
Illegally Overtime
Receive more $
Make more
at the end of each
Reduce Shop around
Buy less • Food

• Clothing
• Utensils
• Entertainment
• Travel
• Other
Issue Tree Example
Saving Money
How? How? How? How?
Inherit
Legally ...
Receive a
Illegally Overtime
Receive more $
Make more
at the end of each
Reduce Shop around
Buy less • Food

• Clothing
• Utensils
• Entertainment
• Travel
• Other
Issue Tree Example
Saving Money
How? How? How? How?
Inherit
Legally ...
Receive a
Illegally Overtime
Receive more $
Make more
at the end of each
Reduce Shop around
Buy less • Food

• Clothing
• Utensils
• Entertainment
• Travel
• Other
Issue Tree Example
Saving Money
How? How? How? How?
Inherit
Legally ...
Receive a
.
Illegally Overtime
Receive more $
Make more
at the end of each
Reduce Shop around
Buy less • Food

• Clothing
• Utensils
• Entertainment
• Travel
• Other
Issue Tree Example
Saving Money
How? How? How? How?
Inherit
Legally ...
Receive a
Illegally Overtime
Receive more $
Make more
at the end of each
Reduce Shop around
Buy less • Food

• Clothing
• Utensils
• Entertainment
• Travel
• Other
General Principle
Issue Trees address “how” questions,
Hypothesis Trees conjecture “why?”
Hypthesis Tree Example
Saving Money
Which?
Why?
Why?
Why? Hypermarkets
Key spending
categories have Price Club
competition in Home Depot
new formats
Savings Auto mall
are feasible New formats offer
same quality at
Comparison lower price
shopping is
an interesting Opportunity cost of
The best way for opportunity additional time
me to have more Additional taken up by comparison
money at the end of investments shopping
the month is to do not wipe
spend less through out savings
comparison Savings in $
shopping Changing
my lifestyle To compensate for demanding workload, I need to invest
is not an in weekly visits to the spa and the opera
option
My profession does not allow me to wear
lower quality clothes
To balance the junk food I eat during the week, I need at
least one three-course meal on the weekend 82
General Principle
Logic Trees aren’t restricted to just
financial analyses … they’re also
used to structure strategic ideas.
Logic Tree Example
Strategic Options
Source: Minto, Pyramid Principle

Logic Tree Example
Strategic Options

Logic Tree Example
Strategic Options

Logic Tree Example
Strategic Options

Logic Tree Example
Strategic Options

Another Strategic Logic Tree example:
Growing a business from its core …
Start with the first level:
‘adjacency categories”
Then expand each adjacency
category into sub-categories
Logic Trees: Tricks of the trade …

• Note that many frameworks are, in essence,
logic trees that have been codified for re-use.

• Also note that logic trees are simply visual
depictions of traditional hierarchal outlines
Conclusion
I. Big Idea #1
A. Sub Point #1
1. Detail Point #1
2. Detail Point #2
3. Detail Point #3
B. Sub Point #2
C. Sub Point #3
II. Big Idea #2
III. Big Idea #3
If you’re more comfortable with words than pictures, just use outline format
Note: More people ‘process’ visuals (pictures) better than semantics (words)

• Finally, note that logic trees are a useful device for
crafting presentations … i.e., for organizing ideas
into a storyline prior to “ghosting” a presentation.
Outline Logic Tree “Ghost” Deck*
Conclusion
I. Big Idea #1
A. Sub Point #1
1. Detail Point #1
2. Detail Point #2
3. Detail Point #3
B. Sub Point #2
C. Sub Point #3
II. Big Idea #2
III. Big Idea #3
* A Ghost Deck is a preliminary draft of a presentation with headers & footers

that lay out the storyline … and representations of likely supporting charts.
For example, here’s a Logic Tree

used to develop this slide deck …
Analytical Method: Mind Mapping

… a technique for creating Logic Trees
Analytical Method – Mind Mapping
Mind Mapping is a technique for analysts who

work more effectively with visuals (pictures) than
semantics (words) …
The preceding visual representations of the typical

matrix format and of the traditional outline format
are examples of Mind Maps

The basic Mind Mapping method:
1. Brainstorm a ‘laundry list’ of ideas (e.g. on a whiteboard)
2. Group ideas into logical categories, i.e. connect related ideas
(e.g. chronological sequence, by category, by function)
3. Order the categories in a logical arrangement and order the ideas
within each category
4. Eliminate duplicate ideas, consolidate small ideas into bigger ideas,
5. Draw a visual layout of the ideas … a Mind Map
6. Inspect the Map for completeness (no gaps), parallel structure (same
levels of abstraction), and logical relationships (e.g. cause & effect)
7. Iteratively revise the Mind Map as necessary to make it right !
• Laundry List • Logic Tree

Field of Vision
(8-1/2 x 11, whiteboard)
Shorthand entries
Loosely structured
(Obvious categories, misc.)
• Scan & Sort

Clear the debris
Connect the dots
Iterate and refine For details, view online
tutorial: Mind Mapping
Good News
There are apps and software packages that
facilitate the Mind Mapping process …
Good News
There are apps and software packages that
facilitate the Mind Mapping process …
Really Good News

Highly functional apps are available FREE !
Get this for your iPad and start
playing with it … it’s free!
Once you become a believer
… also free, more functionality
Mind Mapping’s conceptual leader … and the
gold standard in functionality and price (~$500)
What we’ve covered …

Key Concepts
• Issues Analysis
• Drilling Down
• Analytical Zooming
• Parallel Structure
• MECE
Key Concepts Methods

• Issues Analysis • The 5 Whys
• Drilling Down • Fishbone Diagrams
• Analytical Zooming • Logic Trees
• Parallel Structure • ROI Trees
• MECE • Mind Mapping

Key Concepts Methods

• Issues Analysis • The 5 Whys
• Drilling Down • Fishbone Diagrams
• Analytical Zooming • Logic Trees
• Parallel Structure • ROI Trees
• MECE • Mind Mapping

Putting everything back into context …



How to do it …

Key Issues Analysis (KIA) identifies and

documents important sub-issues, related
hypotheses and required analyses …
hypotheses and required analyses.
Key Issues Analysis (KIA)
Key Question:
Issues Hypotheses Analyses
• Drill down from the SCQ Question
• MECE: Mutually Exclusive (no overlaps),

Collectively Exhaustive (no gaps)
• Several supportive methods, including

“5 Whys” and Logic Trees (Mind Maps)
Key Question:
• For efficiency, consultants’ problem solving

methodology is generally hypothesis-driven
• That is, they conjecture likely answers and

then try to validate or refute them
• Hypotheses are subject to iterative revision

as facts and insights become available.
• Process focuses analytical efforts (versus

broad scope exploratory investigations)
Minto, Pyramid Principle

Key Question:
• Goal: proving or disproving hypotheses
• Fact-gathering via info searches, interviews

and raw data collection.
• Extensive data set “mashing” and “cutting

the data” … e.g. clustering
• Continual 80-20 re-focusing for efficiency
• Mindset: insights, not just calculations

KIA: Boiling it down …
If you could only ask a vital few questions

(say, 4 to 6 of them), what would they be?
Sufficient …
If you could only ask a vital few questions

(say, 4 to 6 of them), what would they be?
If those questions are answered, will you

have a certain answer to the Key Question?
Quality checking a KIA …
Key Issues Analysis
Good KIAs are …
• High Level … client and case-specific
Don’t get too deep into the weeds until the need arises
… think at an appropriately high level of abstraction.
Note: Eventually, as a study progresses, it becomes

appropriate to work at the tactical or operational
levels of abstraction, i.e. to dive deeper
Key Issues Analysis
Good KIAs are …
• High Level … client and case specific
• Parallel … hierarchal logic structure
Issues should all be at approximately the same level of abstraction.
Extreme example: “Should we be in this business?” and “Where should

we locate the factory?” are at radically different levels of abstraction.
Key Issues Analysis
Good KIAs are …
• Answerable … yes or no, or a number
Common guidance: The answer to an

issue should always be “yes” or “no”
More practically, it just shouldn’t be open-ended.
Often, the answer is a number, or a range of

numbers, e.g. “what’s the breakeven point?”
Key Issues Analysis
Good KIAs are …
• Sequential … if “no”, rest of Qs are irrelevant
Issues should ordered so that disqualifying issues are considered first.
For example: Generally, if a market is unattractive, it doesn’t matter if the

company has a capability to serve the market … so the company’s capability
doesn’t need to be analyzed
Key Issues Analysis
Good KIAs are …
• Assignable … tied to analytical tasks
Keep in mind that the KIA ties directly to work planning.
So, issues should be “chunked” into analytical tasks.

Key Issues Analysis
Good KIAs are …
• Assignable … tied to analytical tasks
And, Collectively Sufficient to answer the

Key Question (and-or the client’s question)
Closing one more loop …

Flashback
The pivotal case Question from the SCQ Analysis
is a direct linkage to, and the starting point for,
the Key Issues Analysis (KIA) …
Analytical Process Map
Key
Question
© K.E. Homa
And, the Key Issues Analysis (KIA) is often
the basis for clarifying or redirecting the
SCQ’s pivotal case question …
Key
Question
Problem
Restatement
Sub-Issues
© K.E. Homa
Also, the Key Issues Analysis (KIA) is
the basis for the case’s work plan …
Key
Question
to
Work
Plan
Problem
Analyses
Restatement
Sub-Issues
Still more to come …
© K.E. Homa
Professor Ken Homa
Georgetown University
Key Consulting Skill #1 – Part 3

Framing Complex Problems
Issues Analysis & Logic Trees
Preliminary Discussion Draft

Incomplete Without Extensive Oral Elaboration
Proprietary Material
© K.E. Homa

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Professor Ken Homa

Key Consulting Skill #1 – Part 3

Preliminary Discussion Draft

1. Frame complex problems

2. Generate testable hypotheses

3. Gather and analyze facts efficiently

4. Craft creative, practical solutions

5. Syndicate support and mobilize

1. Frame complex problems

2. Generate testable hypotheses

3. Gather and analyze facts efficiently

4. Craft creative, practical solutions

5. Syndicate support and mobilize

1. Frame complex problems

1. Frame complex problems

• Grasp the context … quickly !

• Identify the key question

• Drill down to pivotal sub-issues

1. Frame complex problems

• Grasp the context … quickly !

• Identify the key question

• Drill down to pivotal sub-issues

Some General Principles …

General Principle – Issue Analysis

General Principle – Issue Analysis

Generally called “decomposing a problem”.

General Principle – Issue Analysis

Consultants call this process “issue analysis”.

General Principle – Issue Analysis

Consultants call this process “issue analysis”.

An issue analysis identifies the specific questions

* For details, see: Framing Complex Problems Part 2 - SCQ Analysis

General Principle – Parallel Structure

General Principle – Parallel Structure

That is, start at a high, panoramic level of

General Principle – Parallel Structure

That is, start at a high, panoramic level of

The process is called “analytical zooming”

General Process – Analytical Zooming

Keep thinking at the same level of granularity

Eventually, go as deep into the details as is

Google Maps Ocean View Ocean Exploration

1. State 1. Panorama 1. Fly over in an airplane

2. City 2. Area 2. Hover in a helicopter

3. Block 3. Surface 3. Skim surface in a boat

4. Street 4. Shallow water 4. Submerge … snorkel

5. House 5. Deep water 5. Dive deep … scuba

6. Room 6. Ocean bottom 6. View bottom w/ submarine

7. Chair 7. Sub-strata 7. Penetrate with drill

General Principle - MECE

General Principle - MECE

That is, there should be no redundancies that might

General Principle - MECE

That is, there should be no redundancies that might

… and, the set of issues should be sufficiently

Think: analytical tasks

Think: analytical tasks

Assign “chunks” of work with

Think: analytical tasks

Minimized overlaps If these questions are answered,