1. position 6. achieve 3. uncover 5. build 2. sense 4. solve research causes of the problem and...

1. Position1. Position

6. Achieve6. Achieve

3. Uncover3. Uncover

5. Build5. Build

2. Sense2. Sense

4. Solve4. Solve

Research Causes of the Problemand Develop AlternativeSolutions

Research Causes of the Problemand Develop AlternativeSolutions

PSU Problem Solving Process

Problem Statements

Remember, the problem is the gap between the ideal and actual state.

First, define the ideal state BUT or HOWEVER or

UNFORTUNATELY Second, define the reality.

This is the condition that prevents the goal or ideal state of statement #1

Problem statements, con’t

Third, state the consequences Discuss the research path you will

take to uncover alternatives to solve the problem

Example

Statement 1: Fred Meyer is a company committed to the

community, and to providing a healthy and fair work environment

HOWEVER, Statement 2:

The recent firing of an employee for a small, but terminal, offense has generated a maelstrom of bad publicity for Fred Meyer management and HR policies

Fred Meyer problem statement

As a result, some customers are acting in sympathy with employees by choosing to shop at other stores, and complaining about Fred Meyer in blogs and through mass media. The resulting bad publicity hurts Fred Meyer’s position in the community and could have a negative financial effect.

Fred Meyer Problem

Research Path What actually happened? What is Fred Meyer’s policy? Is Fred Meyer’s policy in keeping with its

mission? What has been the community response? How has Fred Meyer responded to the

community response? Is this isolated or systemic? Is the union involved?

Use a fishbone diagram to trace back the problem

Fred Meyer problem

Review possible solutions Identify several

Ignore it; it will pass Meet with union, review contract Concentrate on internal communications Present the benefits of working at Fred Meyer

in a more public way Increase community goodwill activities Hire back the employee Change the policy Etc.

Fishbone Diagrams and Causal Relationships

Build a diagram of the problem by tracing back from the problem…what are the factors that are leading to the problem and how are they related?

Consider factors that reinforce the problem, i.e. poor communications channels.

Brainstorming

Use free form dialogue to unleash new, seemingly unrelated issues and ideas

Use storytelling to uncover relationships in systems

Use techniques of improvisational comedy to release creativity




5. Build5. Build

2. Sense2. Sense

4. Solve4. Solve


Avoid Analysis Paralysis

After all this analysis – what now?1) One really great obvious solution,

or…2) Some creative alternatives

So, if 2.) – How do you decide? Intuition and gut feel helps, but… Force yourself to be objective




5. Build5. Build

2. Sense2. Sense

4. Solve4. Solve Analyze Data, Evaluate theAlternatives and Choose theBest Solution.

Analyze Data, Evaluate theAlternatives and Choose theBest Solution.


What are the variables?

Cost How much? Cost savings now or in the long term? Hidden costs? Additional costs down the road? Does it meet budget?

Benefits Profits? Better quality? More customer satisfaction

More variables…

Intangibles Improve reputation? More loyal customers?

Time How long will it take? Potential delays?

Feasibility Realistic? What are the obstacles?

More variables…

Resources Personnel available? What will suffer if

they move to this project? Risks

Competitor response? Loss of competitive advantage?

Ethics Is it legal? Meet mission and values?

Do A few Checks First

Make sure the solutions still match the problem

Make sure the solutions are still consistent with mission, vision and values

Check for impact on the key stakeholders

Think About Risk

Your risk propensity relative to gain will affect personal decision making: Final seconds of game with rival, coach

must choose a play with a.) 95% chance of a tie score or b.) 30% chance of victory

College senior with talent must choose a.) medical school (80% chance of success) or b.) acting (20% chance of success)

Think About Risk

Improbable Unlikely Likely Very Likely

Low

Med

ium

Hig

h

Ris

k o

f n

egat

ive

imp

act

Likelihood of events occurring

Objective Decision-making Tools

Use objective criteria and rational methods A ranking matrix with criteria Screening tables Pros and cons Pass/Fail on criteria Have a What-If? meeting

Decision Making Example Should I remove the vinyl siding on my house? Issues:

It’s 50 years old! It’s cracked and stained in some places. It looks cheesy. Easy to maintain Don’t know what the wood is like. Would improve resale. Cost = $20,000 Should I do the windows and roof, too? (add

$40,000)

Decision Criteria

Short term financial impact. Long term financial impact. Increases flexibility if I want to sell. Will the market return the

investment? Pride and satisfaction.

Ranking Matrix

Give a weight to each of the criteria Total of weights must add to 1

Rank each solution in terms of how well it satisfies the criteria From 1 to 10

Multiply the weights by the ranks for each option and add them up

Higher score wins

Decision matrix

Criteria Ranking Leave siding

Remove siding

Short term cost

.5 10(5.0)

1(.5)

Long term return/resale

.3 4(.12)

8(.24)

Pride & satisfaction

.1 2(.2)

10(1.0)

Maintenance .1 10(1.0)

3(.3)

Total 1.0 6.32 2.04

Screening Table

Judge alternatives as satisfactory or not – choosing a camera

Alternatives MPixels Price($) Memory Zoom

Olympus 4.1 $1,100 32 4x

FujiFilm 3.0 $550 16 3x

HP 4.0 $500 16 8x

Constraints >2.0 <$800 >0 >=3x

Pros And Cons

List the pros Score them on a +1 to +10 scale

List the cons Score them on a -1 to -10 scales

Add them up Positive is good, or look for a difference

in the scores for multiple options

Do A few Checks First

Make sure the solutions still match the problem

Make sure the solutions are still consistent with mission, vision and values

Check for impact on the key stakeholders

Decision Making In Turbulent Times

Don’t go it alone, involve others, share info

Learn, don’t punish Know when to bail Practice the five “WHYS” Engage in rigorous debate

What should you do?

Lyle is a brand manager at a gourmet cookie company.

Sales have been flat for 18 months. Studies show that only a limited

number of consumers are willing to pay a premium for the better cookie.

Lyle has to increase sales without diluting brand image

Problem solving

Lyle puts together a diverse team to brainstorm options Couponing Drop prices Look for a corporate partnership

Decision: Look for a corporate partner to create an ice cream cookie/sandwich

Now what?

While Lyle is researching his options, Supreme Ice Cream approaches him and offers what seems to be an attractive deal.

Should he…? Grab the deal? Revisit the partnership idea? Seek out other offers? Reconvene the team?

Activity 4.1

Objective – use a decision matrix to judge the group activities.

As a group – agree on five criteria to rate the activities – e.g., “fun”.

Weigh the criteria such that the total adds to 1.0. Rate each activity on a scale of 1 to 10 and create the

matrix Activity 1.1 Mission/Vision Activity 1.2 School Registration Activity 1.3 Cognitive Bias Quiz Activity 2.1 Video Store Part 1 Activity 3.1 Video Store Part 2 Activity B Class data analysis

Rank the six activities from best to worst.




5. Build5. Build

2. Sense2. Sense

4. Solve4. Solve Analyze Data, Evaluate theAlternatives and Choose theBest Solution.

Analyze Data, Evaluate theAlternatives and Choose theBest Solution.





5. Build5. Build

2. Sense2. Sense

4. Solve4. Solve

Build the Business Case forYour Solution

Build the Business Case forYour Solution


Build A Business Case

What is a business case? A formal presentation of the problem

solution/s that have been developed Reviewed by some sort of decision

making authority Solid logic Supporting evidence A good test to see whether you need

more research

Who Does It?

The problem solving team or a representative subset Diversity is good A range of stakeholders

Activities In-depth outcome analysis Short and long term consequences Review adherence to

Mission/Vision/Values

First – Ethical Screening

Is the solution ethical? What does ethical mean? How would you define ethics? Ethics – a system of values that people use to

determine whether actions are: right or wrong fair or unfair moral or immoral

Business ethics - the application of ethical standards to business behavior.

Values Versus Ethics

Test it against business values. What is a value? A principle, standard or quality

considered worthwhile or desirable. Values contribute to our system of

beliefs, ideas and opinions. A value is a core from which we operate. Business values are beliefs, business

principles and ways of doing things that govern company operations and the behavior of organization members.

Corporate Values

Are the values real or published? Enron valued:

Communications Respect Integrity Excellence

What did they really value (at least some of the senior management)?

Money and profit – at the expense of customers, shareholders and employees

Corporations As Citizens

Analyze your solution based on a broader set of societal ethical principles

Consider all of the stakeholders Customers Suppliers Competitors Communities and societies

Encouraging Ethical Behavior How can you encourage ethical behavior?

Define and communicate ethical standards Educate and train Case discussions and exercises

Is unethical behavior always conscious and explicit? Bounded ethicality – people sometimes act in

ways that are inconsistent with their ethical standards

Identify and understand psychological tendencies in order to better guarantee ethical behavior

Making Ethical Decisions

Are ethical and legal the same thing? Legality is the lowest common denominator

Four tests of your decision: Is my solution the best thing for the most

people? What if everyone did what I want to do?

What kind of a world would it be? Am I treating others the way I would want

to be treated? What if my decision were advertised on a

billboard?

Hundreds Protest Global Warming…

1. position 6. achieve 3. uncover 5. build 2. sense 4. solve research causes of the problem and...

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