Session II

Business Problem Framing

14
th
October, 2013
Business Problem Framing
17
th
October, 2013
Eight Elements
Problem
Alternatives
Objective
Linked Decisions
Tradeoffs Risk Tolerance
Uncertainty Consequences
First five form the core of ProACT
approach
Help clarify decisions in evolving
environments
Smart
Choices
The ProACT Approach
The first five constitute the core of our approach and applicable to virtually any decision
The acronym ProACT states that the best approach to decision situations is a proactive procrastination is decision makings
worst enemy
The next three elements help clarifying decisions in volatile or evolving environments
Essence is to divide and conquer and think systematically about each part
ProACT The eight keys to decision making I
The way decision is framed at the outset can make all the difference. To chose
well, decisions problems need to be stated carefully acknowledging their
complexity and avoiding unwarranted assumptions and option-limiting prejudices
e.g. Buying the right
fitness equipment
Work on right
decision
problems
Your decision should get you where you want to go. Ask yourself what you most
want to accomplish and which of your interests, values etc. are most relevant.
Thinking through objectives gives direction to decision making
e.g. Attitude vs.
Lifestyle
Specify your
objectives
You alternatives represent the different courses of action you have to chose from.
If you didnt have different alternatives you would not be facing a decision. Your
decision can be no better than your best alternatives
e.g. Mother vs.
Grandmother
Create
imaginative
alternatives
Alternatives can be several and can be sobering yet sometimes exciting.
Consequences of each alternative will help to identify those that best meet your
objectives
e.g. Moving location
Understand the
consequences
Objectives frequently conflict with one another and thus some must be sacrificed
for another. In most complex decisions there is no one perfect alternative. Task is
to chose among less than perfect possibilities through priority setting
e.g. Continued
Mother vs.
Grandmother
Grapple with
your tradeoffs
1
2
3
4
5
Good decision doesnt guarantee a good result
Always focus your thinking where it matters most
There is no harm in going back to the drawing board during problem
framing
Key takeaways
Clarify your uncertainties
Uncertainty makes choice far
more difficult
Effective decision making
requires that you confront
uncertainty by judging the
likelihood of different
outcomes and assessing their
potential impact
E.g. Savings for an event vs.
market crash
Evaluate your risk tolerance
Think hard about your risk
tolerance. Each decision with
risk may not bring the desired
consequences
A conscious awareness of
your tolerance will make
decision making smoother
with an alternative with the
right level of risk for you
E.g. Savings in debt vs. equity
Consider linked decisions
Many important decisions are
linked over time; what is
decided today can influence
your choices tomorrow
Key is to isolate and resolve
near-term issues which
gathering information about
possible issues that will arise
later
E.g. Tata Nano in Bengal vs.
Sanand
6 7 8
Managing decision making through changing circumstances and volatile environment
CASE
ProACT The eight keys to decision making II
Bills soundproofing business
Decision Problem
Be creative about your problem definition: Its easy to state the problem in the most obvious way
or the first way it appears
Every problem has a trigger the initiative force behind it. Create decisions for yourself before
problems arise. E.g. Conflict minerals vs. Supply chain improvements.
The way you state your problem frames your decision (SG)
Turn problems into opportunities
What can I gain from this situation what are the
opportunities? E.g. Carbon credits vs. stringent laws
Define decision problem
Ask what triggered this decision? Assumption, trigger,
connection between the trigger and the problem. E.g.
Outsource vs. hire new software
Reexamine your problem definition as you go
Consider several problem definitions in the
beginning also pause and reexamine the choice. E.g.
Competitor grades vs. job
Problem Coverage
Aimed at
Accurately posed problems
Creative problem definition
Gathering of data
Avoiding procrastination
Expansive and flexible
thought
Identifying multiple problems
Validation of possibilities
If you dont know where you are going,
any road will get you there."
Objectives
Form the basis for evaluating the available alternatives
Can be personal but need not be self-centered
Determine what information to seek
Help in explaining the choice to others
Determine a decisions importance and how much time and effort it deserves
Pitfalls
Step 1: Write down the concerns to be addressed through your decision
Step 2: Convert concerns into succinct objectives
Step 3: Separate ends from means to establish fundamental objectives.
Asking Why? e.g. Minimizing emission
Step 4: Clarify what you mean by each objective
Step 5: Test your objectives to see if they capture your interests
5-Steps to
identify
objectives
Not taking enough time to specify clear objectives
Hard concerns over Soft concerns
Short Term Bias Getting it right takes effort
Narrow focus
Profitability towards feasibility and sustenance
In-Closing
Carry forwards
How to define the decision problem
to solve the right problem HBP
Defining right Problems towards the
right Objectives
Profitability
Next Session and
Pre-reads
Revision and Pop-Quiz
on Problem framing
How to define the
decision problem to
solve the right problem
HBP
The Framing Challenge:
What is the real
problem? HBP
Chapter 1 and 2 of
Smart Choices
Above and Beyond
Next Session and
Pre-reads
The framing challenge:
What is the real
Problem? (HBSP ISBN -
13:978-1-4221-0663-4,
13 pages)
Group Assignment:
Airline Case Due by
5.00 P.M on Monday the
21
st
of October, 2013
Chapter 2 and 3 of
Smart Choices