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Analytical Thinking Training
Analytical Thinking Training
Course Outline
I. Overall Process
II. Defining the Problem
III. Formulating the Hypothesis
IV. Collecting the Facts
V. Conducting the Analysis
VI. Developing the Solution
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Course Objectives
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At the end of this session, participants should be able
to….
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OVERALL PROCESS
Analytical Thinking follows the scientific
approach to problem solving
Problem
Solution Hypothesis
Analysis Facts
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Defining the Problem Problem
Solution Hypothesis
Analysis Facts
Definition:
• A problem is a situation that is judged as something that needs to be
corrected – implies that a state of "wholeness" does not exist
Importance:
• It is our job to make sure we’re solving the right problem – it may not be
the one presented to us by the client. What do we really need to solve?
Basic Concepts:
• Most of the problems are initially identified by our clients
• Defining the problem clearly improves focus – it drives the analytical
process
• Getting to a clearly defined problem is often discovery driven – Start
with a conceptual definition and through analysis (root cause, impact
analysis, etc.) you shape and redefine the problem in terms of issues
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Formulating the Hypotheses Problem
Solution Hypothesis
Analysis Facts
Definition:
• Hypothesis is a tentative explanation for an observation that
can be tested (i.e. proved or disproved) by further
investigation
Importance:
• Start at the end - Figuring out the solution to the problem,
i.e. "hypothesizing", before you start will help build a
roadmap for approaching the problem
Basic Concepts:
• Hypotheses can be expressed as possible root causes of
the problem
• Breaking down the problem into key drivers (root causes)
can help formulate hypotheses
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Collecting the Facts Problem
Solution Hypothesis
Analysis Facts
Definition:
• Meaningful information (has merit – not false) that is qualitative (expert
opinions) or quantitative (measurable performance) to your decisions
Importance:
• Gathering relevant data and information is a critical step in supporting
the analyses required for proving or disproving the hypotheses
Basic Concepts:
• Know where to dig
• Know how to filter through information
• Know how to verify – Has happened in the past
• Know how to apply – Relates to what you are trying to solve
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Conducting the Analysis Problem
Solution Hypothesis
Analysis Facts
Definition:
• The deliberate process of breaking a problem down through the
application of knowledge and various analytical techniques
Importance:
• Analysis of the facts is required to prove or disprove the hypotheses
• Analysis provides an understanding of issues and drivers behind the
problem
Basic Concepts:
• It is generally better to spend more time analyzing the data and
information as opposed to collecting them. The goal is to find the
“golden nuggets” that quickly confirm or deny a hypothesis
• Root cause analysis, storyboarding, and force field analysis are some
of many analytical techniques that can applied
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Developing the Solution Problem
Solution Hypothesis
Analysis Facts
Definition:
• Solutions are the final recommendations presented to our
clients based on the outcomes of the hypothesis testing
Importance:
• Solutions are what our clients pay us for…
Basic Concepts:
• It is important to ensure the solution fits the client –
solutions are useless if they cannot be implemented
• Running an actual example through the solution is an
effective way of testing the effectiveness and viability of the
solution
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TOOLS AND TECHNIQUES
FOR
Result (Problem)
Detail Detail
Cause Cause
FOR
Hypothesis #1A
Issue #3
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Key Components of Issue Diagram
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Identifying the Issues
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Formulating the Hypotheses
Etc.
Divest Cost
Hypothesis #2A What are some
Widget X Effectiven
ess? possible
Business?
Problem Issue #2 Hypothesis #2B answers to the
issues?
Etc.
How many
Key Question #1A-a players are
The market is large. there in the
Market market?
Interest? Hypothesis #1A Key Question #1A-b
Issue #1 How many
Hypothesis #1B Key Question #1A-c are large
enough to
take on the
Divest Widget client's
X Business? Cost
Effectiveness? Hypothesis #2A business?
What questions
Problem Issue #2 need to be
answered to
Hypothesis #2B prove/disprove the
hypothesis?
Large percentage
of employees will Key Question #3A-a
Impacts on likely retire in two
Employees? years. How many
Hypothesis #3A Key Question #3A-b employees
Issue #3 are 50 years
old or older
Hypothesis #3B Key Question #3A-c and
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Common Pitfalls in Creating Issue Diagram
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Brainstorming – A Method for Identifying Issues and
Formulating Hypotheses
FOR
• Number of
companies
How many in the
Key Question #1A-a are large industry
enough to • Revenues
take on the for the last
Hypothesis #1A Key Question #1A-b client's 5 years
Issue #1
Hypothesis #1B What information
business? • Etc.
or data needs to
Problem Issue #2
Hypothesis #2A Key Question #1A-c be collected to
Hypothesis #2B
answer these
Key Question #3A-a questions?
Hypothesis #3A • Ages of the
Issue #3
Hypothesis #3B How many employees
Key Question #3A-b employees • Employee
are 50 years interest
old or older level
Key Question #3A-c and • Etc.
interested in
retiring?
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Data Collection Techniques
Qualitative Quantitative
Techniques VS Techniques
(Flexible) . (Less Flexible)
• Produce qualitative data • Structured questionnaires
that is often recorded in designed to quantify pre- or
narrative form post-categorized answers to
• Useful in answering the questions
"why", "what", and "how" • Useful in answering the
questions "how many", "how often",
• Typically includes: "how significant", etc.
– Loosely structured questions
interviews using open- • Answers to questions can
ended questions be counted and expressed
– Focus group discussions numerically
A skillful use of a combination of qualitative and quantitative techniques
– Observations
will give a more comprehensive understanding of the topic
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TOOLS AND TECHNIQUES
FOR
What
Whatperformance
performanceareas
areasare
areweak?
weak? Benchmarking
Benchmarking
What
Whatare
are the
thecore
corecompetencies
competenciesof
ofthe
the client?
client? SWOT
SWOT
What
Whatforces
forcescan
caninfluence
influencethe
the problem?
problem? Force
Force Field
FieldAnalysis
Analysis
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Specific Sequential Steps that lead up to the Analysis
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Apply analytical tools and move back upstream
What analysis
ng
Hypothesis #2A
Problem Issue #2 needs to be done
Hypothesis #2B
to answer this
question?
Hypothesis #3A Key Question
Issue #3 #3A-a Age of
Hypothesis #3B
Key Question
#3A-b employees 3. Collect required
information per the
Key Question
#3A-c
Employee
How many interest level in Analytical Tool selected
employees are retiring
50 years old or
older and
interested in 4. Once you complete your analysis,
retiring? move back upstream to answer the key
question you started with 38 of 58
Analytical Techniques
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Benchmarking
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SWOT Example
Assessment
Assessment of
of the
the organization,
organization, its
its people,
people, services,
services, competenci
competenc
Strengths Weaknesses
Client has a global Client has limited resources
infrastructure to service all for expanding its global
types of customers reach
Services are in high Key processes are not very cost
demand in most parts of competitive when compared to
the world other service providers
Assessment
Assessment of
of direct
direct and
and indirect
indirect forces,
forces, social,
social, economic,
economic, polit
polit
Opportunities Threats
Untapped demand exists in Other clients are investing
almost half of the World in newer technologies
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Force Field Example
Problem:
Problem: Agency
Agency is
is not
not strategically
strategically focused
focused
Positive
PositiveForces
Forces –– Negative
NegativeForces
Forces––
Promotes
Promotes the
theSolution
Solution Inhibits
Inhibits the
theSolution
Solution
A:
A: Proposed
Proposed Solution
Solution -- Design
Design and
and develop
develop an
an on-line
on-line database
database ss
The Costs The Benefits
(minuses)
• Software License Fees
(pluses)
• Consistent Reporting
• Upgrade network • Reduced Data Entry
capacity • Much faster
• Database turnarounds when
development time updating master
• Training of end-users records
• Requires regular • Improved accuracy in
Choice B: Do Nothing – Status
Choice B: Do Nothing – Status Quo
Quo
maintenance reporting
• Software License Fees Net
Net
• Maintenance Costs Benefit
Benefit =
=
$$
• Planned Upgrades 250,000
250,000
Change
Change in
in Costs
Costs Choice
Choice A
A –– B
B Change
Change in
in Benefits
Benefits Choice
Choice A
A –– B
B
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= $$ 700,000
700,000 == $$ 950,000
950,000
Impact Analysis
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Impact Analysis Tools
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Pareto Analysis
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Pareto Chart
Measure
# of Employees, etc.
Downtime, Errors,
• Don’t rush out and collect information until you know what
analytical tools you need to use – each tool has its own
information needs
• Use a combination of tools to cover all the bases
• All decisions involve some assumptions – so you will never
have all the facts
• Analysis is a discover driven process, it moves
incrementally in baby steps – you learn, adjust and go
through numerous iterations until you have insights; i.e. you
can now take action on the issue or problem
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TOOLS AND TECHNIQUES
FOR
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Summary
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Questions and Comments
Thanks for
your participation!
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