Logic in Thinking and Writing How To Guide 1224360227640851 9

Logic in Thinking and Writing How to Guide
Jan 2006
Version 1.2
Copyright EQuest Consulting Pty Ltd 2006
Acknowledgements:
Elements of the material presented in this pack have been developed from: The Minto Pyramid Principle - Logic in Writing, Thinking and Problem Solving by Barbara Minto (1996) The Fifth Discipline Fieldbook by Peter Senge, Richard Ross, Bryan Smith, Charlotte Roberts and Art Kleiner (1994) Requisite Organisation by Elliott Jacques (1998) Complexity by Roger Lewin (1989) Teach Yourself to Think by Edward De Bono (1995)
Page 2 Logic in Thinking and Writing How To Guide Version 1.2

Copyright EQuest Consulting Pty Ltd
Contents
Section I: Section II: Section III: Section IV: Section V: Section VI: Section VII: Thinking and the Thought Process SIP, A Vehicle for Thinking and Communication Unity and SIP Constructing a SIP Document Logic in Thinking Constructing a SIP Document Logic in Writing Communicating with a SIP Constructing a SIP Document and
Presentation
Section I Thinking and the Thought Process
A. What is Thinking? B. What Makes Thinking Difficult
C. Approaches to the Thought Process

D. The Unity Thought Process
Thinking Is the Hardest Work There Is... ...Thats Why So Few People Do It - Henry Ford

A. What is Thinking?
What is thinking? The answer is that no one really knows, but we do know the purpose of thinking, and that is to stop thinking:
The human brain tries its hardest to simplify life by setting up routine patterns of perception and action. Once you identify the pattern you flow along it without further effort. For example, if you had to think through which order to put on 6 pieces of clothing you would never leave the house as you need to sort through 47,000 combinations, but we get dressed quickly each day
The problem we have is that in business, this mechanism kicks in all too frequently. That is, when managers are faced with a problem / opportunity they implicitly rely on these patterns of perception (which have developed from a combination of their skills, experience and knowledge) to solve it this is NOT thinking Thinking is the discipline of restraining the natural impulses and forcing the brain to deal with what is in front of it, not what it perceives is in front of it

B. What Makes Thinking Difficult?

Birds fly, when they get tired they land. Man thinks, when he gets tired he says I understand (Japanese proverb) Thinking is made more difficult by the confusion of two forms of complexity: Detail complexity the type of complexity that occurs due to the number of variables; and Dynamic complexity - The type of complexity that occurs due to the nature of the interrelationships between variables (or elements of a system) The thought task of detail complex situations is based around how to bring the detail together and create order
The thought task of dynamically complex situations is based around identifying the variables and understanding the interrelationships between them
C. Approaches to the Thought Process

Natural for Most People
Left to Right
Start at the beginning and work our way through to the end (this is easier because you always move into an area you already know)
Outcomes are whatever we end up with Primarily concerned with how to pull information together People naturally start at a level of detail they are comfortable with, but not necessarily related to the problem / opportunity Limits the development of insight Commonly results in boiling the ocean
Natural for Few People

Right to Left
Start at the end (outcomes) and work back to the beginning identifying how to get there (this is more difficult because you have to think about where you are going)
Outcomes are planned and rarely adjusted Primarily concerned with the develop of insight (interrelationship between variables) Requires starting at the level of problem / opportunity and working down
Bottom Up
Top Down

D. The Unity Thought Process

The Unity methodology integrates both Right to Left and Top Down
Right to Left because the objective of the methodology is to deliver business outcomes. Given that this is the case then it is also the best place to start
The resulting discussions should be focused explicitly around what do we need to do to achieve y rather than lets build x and hope we get y
Top Down because (a) value is added through the development of insight into a business not by helping them collate data and (b) businesses are focused on solving dynamically complex problem / opportunities which are not resolved with bottom-up methodologies

Section II SIP, A Vehicle for Thinking and Communicating

SIP Proposal Situation What this is all about Implication Why this is important for us Proposal What we suggest we do about it
What is SIP?
Situation, Implication and Proposal How Is SIP Used?
As a general rule for thinking, if you cannot describe in writing to be understood by someone else about your decision problem and what you are doing as a process about it, then you do not know what you are doing. Dr Hossein Arsham

A. What is SIP?
The elements of a SIP document are Situation, Implication and Proposal A proposal is the essence of collaborative thinking and communication, but needs context to be relevant and is therefore supported by a situation and implication
SIP is a structured story which is a vehicle through which your thinking is communicated to others ie: it facilitates the intellectual challenge of getting ones thinking onto paper in a way that is easily communicated and understood
The wording of a SIP story is the vehicle for the thoughts, and as such can only be chosen after the logic has been developed. People who appear to go around in circles when writing documents do so because the thinking is not complete The effectiveness of a SIP document therefore results primarily from:
The logical presentation of ideas that enable clarity and comprehension for thinking The unassailable logic of the thoughts that it presents The way in which it deals with perception through the simplicity, specificity* and clarity of language (*in a world that occurs in conversation, semantics are everything)

B. Situation, Implication and Proposal

The situation consists of a statement(s) about a subject with which all stakeholders are likely to agree The implication is the business impact of a particular situation The proposal is a description of the intended action that is a logical response to the implication(s)

The situation consists of a statement(s) about the subject with which all stakeholders are likely to agree
The situation comes at the front of the story to either lock down what you know or to create a shared and accepted understanding by the audience In any situation where the facts are either previously unknown or ambiguous, a strong situation enables you to create common understanding. The situation may consist of:
Undisputed facts defined in commonly used terms, which are numerated where possible (physicals or financials) Anecdotal evidence about the subject that will be accepted as true
Situation statements are free from opinion, emotions (adjectives) etc Note if you have to make assumptions in your situation, then state them clearly. Clearly stated assumptions that are wrong are better than no assumptions at all, and allow for solution by design rather than argument We can have facts without thinking but we cannot have thinking without facts - John Dewey
The implication is the business impact of a particular situation

The implication is the problem / opportunity. For example the situation may be that we have high process variance in a factory. This in itself is may not be a problem / opportunity. It is when we illustrate that the high process variance is causing (quantifiable) higher than acceptable levels of waste that we have a problem / opportunity
The implication should always have a financial value

The proposal is a description of the intended action that is a logical response to the implication(s)
The proposal must specifically address the implication Proposals for action that are generic rarely lead to successful outcomes because there is no such thing as a generic problem / opportunity (all they indicate is lazy thinking!)
The significant problems we have cannot be solved at the same level of thinking with which we created them - Albert Einstein
Story Example
Situation Bill production has 90 bill cycles per month that are scheduled around systems constraints and contractual arrangements
The volume of accounts distributed varies by up to 50k per day and the timing of expected payments varies from 15 to 29 days
Implication The variation in volumes contributes to variation in workflows for both the front and back office which impact customer satisfaction and costs by reducing service levels at peak times and requiring a buffer to be built into the schedule to protect against unexpected variance which adds 10% ($4m pa) to staff costs The variation in expected payment means that 85% of all payments are received after 16 days driving a capital cost of $6m pa Proposal Smooth out bill volumes across the calendar month to reduce the variation of workflows, reduce costs and improve customer satisfaction Enforce the 15 day payment period

C. How Is a SIP Used?

A SIP document will alter in terms of content during the Unity lifecycle, but is used for three purposes: As a vehicle that forces the author to lock down his or her thinking/understanding at a point in time to enable reiteration The SIP story may be used as a series of hypotheses to guide analytic activity; and The SIP is the basis of all presentations
1. 2. 3.

1.
As a vehicle that forces the author to lock down his or her thinking / understanding at a point in time to enable reiteration*
A high level SIP story may be developed from the barest of details gathered during an meeting/interview/workshop etc Writing down, learning and re-telling your SIP story to yourself / team /stakeholders is the fastest way to test the logic of your thinking, challenge any preconceived notions, reiterate and improve your thinking
Separation of situation from implication provides the insight of clarifying the problem / opportunity that is to be solved
Understanding the real problem / opportunity is vital to the logical order of the process for developing a solution

Why do you reiterate?

BECAUSE YOU ARE NEVER, EVER COMPLETELY CORRECT THE FIRST TIME!!!
Reiteration is the key ingredient of value creation

Value Increase Per Reiteration
100% 90% 80%
Value/Insight
Albert Einstein said, "I think and think for months and years, ninetynine times, the conclusion is false. The hundredth time I am right. It's not that I'm so smart, it's just that I stay with problems longer.
The only way to reiterate is to lock down your thinking (in SIP format) as often as possible and use your peers and stakeholders to challenge that thinking
Go al
70% 60% 50% 40% 30% 20% 10% 0%
Sta rt
Number of Reiterations

2. The SIP story may be used as a series of hypotheses which guide analytic activity
A well constructed SIP clarifies the problem / opportunity and disaggregates it into its logical components
If the SIP has been put together from workshops/interviews (ie not factually proven) it is in fact a series of hypotheses
Proving or disproving these hypotheses should then become the focus of analytic activity - it helps us to avoid boiling the ocean The analytic activity is focused because the hypotheses are provided context by the story format As an issue/idea is disproved the story must be reiterated and developed
A well constructed story clarifies the problem / opportunity and disaggregates it into its logical components enabling focused analytic activity
Situation
Bill production has 90 bill cycles per month that are scheduled around systems constraints and contractual arrangements that create variation in the volume of accounts distributed and the timing of expected payments
Each months bill production process requires 90 bill cycles to generate the bills for 3m accounts
PROVE
The monthly billing cycle is scheduled against constraints that include set pay by dates in ICMS and a contractual requirement with ABC to limit the number of images sent to print each per day to 550k The scheduling system creates daily variation in the volume of accounts by run date and pay by date and the expected revenue due by pay by date The scheduling of pay by dates beyond 15 days delays revenue collection and impacts XYZs cash flow It is likely that variation in the volume of accounts distributed by statement date may be driving variability of calls into 123/126 It is likely that variation in the volume of accounts distributed by statement date may be driving variability of calls into 128
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PROVE
PROVE
Implication
The variation in volumes contribute to revenue collection delays and variation in workflows for both the front and back office which impact customer satisfaction and costs
PROVE PROVE
PROVE
Logic in Thinking and Writing How To Guide Version 1.2

Ghost Pack Structure

Front Page Governing Thought Title Page
Situation Lead Implication Lead Proposal Lead
Situation Lead Lead A Lead B Lead C
Lead A
Lead B
Lead C
Implication Lead Lead A Lead B
Lead A
Lead B
Solution Lead
Lead A Lead B
Lead A
Lead B

3. The SIP is the basis of all presentations

Presentations are not simply to deliver recommendations they are the vehicle through which thinking is communicated Presentations should have a governing thought - the main message that you want your audience to carry away with them
Ordering a presentation with a logical situation and implication, followed by a proposal that answers the problem / opportunity, is more likely to constructively engage an audience than a presentation that enables content to be disputed

Section III Unity and SIP

Unity is a powerful business methodology The Unity methodology is predicated on the progressive synthesis of business solutions throughout the methodology lifecycle This progressive synthesis is represented in the form of artefacts which capture the information required for the Requirements, Design and Business Case (RDB) The RDB is not however, a vehicle for thinking or communication Therefore each progression of the RDB will be accompanied by a SIP document
Section IV - Constructing a SIP Document Logic in Thinking

A. The Importance of Logic in Thinking? B. MECE Mutually Exclusive and Collectively Exhaustive
C. The Top Down Approach to Creating Logical Groupings

D. The Bottom Up Approach to Creating Logical Groupings E. Types of Groupings F. Deductive and Inductive Logic
I might be wrong, but I am not confused - Anonymous

A. The Importance of Logic in Thinking

The Way We Think
We can only remember seven things, plus or minus two*
What We Use to Help Us

We summarise lists into higher order groupings
Tools & Techniques

Levels of abstraction Logical Grouping
We create meaning only with relativity
We take our higher order groupings and compare them We think in terms of wholes rather than parts (Problem solving and insight development is faster and easier when we explicitly create a structure for our mind to work with)
MECE Structural, Time and Degree Orders
We draw conclusions by associating ideas
We impose logical order to the parts of a whole to draw conclusions We limited the number of ideas and pre-sort them to support communication and comprehension
Deductive and Inductive Logic Pyramid Principle SIP
*Miller, George A. The Psychology of Communication: Seven Essays (Basic Books: Pa.) 1967
Example - Problems with a Monthly Report

Buyers are unhappy with the sales and inventory system reports because:
Report frequency is inappropriate Inventory data is unreliable Inventory data comes to late Inventory data cannot be matched to sales data Buyers want reports with better formats Buyers do not want meaningless data Buyers want exceptions highlighted Buyers do not want to do manual calculations
Note: This is what is referred to as a laundry list. Ie: a random list of ideas that has not been pre-sorted to enable comprehension by the reader
Example Rewritten:
The sales and inventory system produces an inadequate monthly report It contains unreliable data It presents it in an unwieldy format It is issued too late to permit action
Easier to Comprehend

Degree order grouping (to be discussed later) was used to rework the example
Complaint
Common Characteristic
Report frequency is inappropriate Inventory data comes to late
1. Bad timing
Inventory data is unreliable Inventory data cannot be matched to sales data Buyers do not want meaningless data
2. Poor data
Buyers want reports with better formats

Buyers want exceptions highlighted Buyers do not want to do manual calculations
3. Unhelpful format

B. MECE Mutually Exclusive and Collectively Exhaustive

MECE is a tool for ensuring that there are no gaps within and no overlaps between our groupings Not MECE MECE
1 1 2 4 3 5

Ensuring the subject we are dealing with has been structured in a MECE fashion enables quality thinking
Separate groups of issues may be dealt with individually If anything is missing it will be recognised more easily We can view the whole picture and reduce the need to search for and ask additional questions Least important issues and noise can be put aside to focus on those that have the biggest impact We can remember the conclusions far more easily

C. The Top Down Approach to Creating Logical Groupings
The Top Down approach to creating logical groupings is to begin with a predefined MECE structure, such as a logic tree, which is progressively detailed This is effective when very little is known about the situation The limitation of this approach is that it may create unnecessary work as everything is examined A further limitation of this approach is that it means that issues and ideas are put into pre-defined baskets which may inhibit the development of insight
A Top Down approach to creating logical grouping is the process of creating MECE logic trees
Types of Logic Trees
Type
Deductive
Description
Starts with problem definition and divides it into components
Elements
Actions, assertions, criteria, questions, topics
Outputs
Key actions, assertions, criteria, questions, topics Key issues
Hypothesis
Postulates a solution hypothesis Reasons and develops a necessary and sufficient rationale to validate or disprove it
Issue
Phrases key issues so that they Issues can be answered Yes or No and sequences them in a logical order showing the dependent action
Actions

A deductive logic tree starts with a problem / opportunity definition and divides it into components. The ends of the tree can be used to divide the basic question into issues
Deductive Logic Tree For ROI
Issues Increase volume Increase revenue Increase profit Reduce cost
Increase price
Improve product mix Reduce R&D cost Reduce production cost Reduce marketing cost Reduce overhead cost
How can ABC improve ROI?
Reduce fixed investment Reduce investment Reduce working capital Reduce stocks Reduce debtors Extend creditors
A hypothesis logic tree postulates a solution hypothesis and develops a necessary and sufficient rationale to validate or disprove it
Hypothesis Logic Tree
HYPOTHESIS REASONS KEY ISSUES Will increasing market share will be too costly? EXAMPLE
Company X must increase the market share of its core product
The best way to reverse declining profit is to increase market share
Will increasing market share require large price reductions?
The best way to establish a large customer base is to increase the market share of the core product
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Is a large customer base important for the success of future products?

An issue logic tree phrases key issues so that they can be answered Yes or No and sequences them in a logical order showing the dependent action
Issue Logic Tree
EXAMPLE Maintain client relationship
Yes
Is it able to implement this strategy?

Yes No Yes
Does company X have a clear business strategy?

No
Propose an implementation program
Does it have the resources and skills to develop its own strategy?
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No
Propose a strategy study for the company

Tenets of Issue Analysis

Issue analysis is based on tenets that make it a powerful tool for sequencing and programming problem / opportunity solving resources
We have clients because clients have issues which aggregate to problem / opportunities
Issue solving must be fact based to be persuasive and to avoid following erroneous norms
Testing norms/hypothesis with facts will ensure resulting arguments are persuasive and problem / opportunity solving process if efficient
There is a sequencing to problem / opportunity solving that is efficient and focused

There is rarely a perfect approach and one should only invest sufficient time in investigating the problem / opportunity structure to highlight the leverage points
Logic tree check list Components are MECE - Mutually Exclusive, Collectively Exhaustive (no gaps, no overlaps)
Logic tree is useful ie. it focuses on the action leverage points of the problem / opportunity
Splits follow a logical hierarchy Elements within splits are logically consistent Remember the 80 - 20 rule, 20% of the effort leads to 80% of the results

A thinking map to link the analysis planning to the issues to be resolved to solve the problem / opportunity
Thinking Map
Issues
The key questions (approximately 2-5) which must be resolved
Sub-Issues
Important elements (approximately 2-5) for each issue
Hypothesis
One or more hypothesised best guess answers to each sub-issue to be proven or disproved through analysis to point the way to the analysis required
Analysis
Analysis required to prove or disprove the hypotheses in the prior column
Data Sources
The source of means of obtaining the data required to complete the analysis
End Products
A description of the end product to be delivered - best described as a ghost exhibit
Responsibiliti es
The person who will obtain the data, undertake the analysis and generate the end product
Timing
The time required (in days or weeks) to gather the data, complete the analysis, and generate the end product
Note that the order will change depending on the type of logic tree used
Issues and sub-issues should fully delineate the basic questions in a logically ordered way
Thinking Map
Issues Sub-Issues Hypothesis Analysis Data Sources End Products Responsibilities Timing
Description
The key questions (approxim ately 2-5) which must be resolved
Important elements (approxim ately 2-5) for each question
Issues and sub issues should be: 1. 2. MECE (Mutually Exclusive Collectively Exhaustive) Logically organised
Sub-issues under appropriate issues Sequenced logically
Example
The key questions (approxim ately 2-5) which must be resolved
Important elements (approxim ately 2-5) for each question
3.
Manageable in number
2-5 issues 2-5 sub-issues per issue
4.
Key so whats

Hypotheses are used to drive the process by leveraging stakeholders beliefs to identify the analysis required to solve the issues
Thinking Map
Analysis Issues Description SubIssues Hypothesis One hypothesised best guess answer to each sub-issue, to be proven or disproved through analysis Significant opportunities exist to improve value of business to an acceptable level by adopting normal industry manufacturing practices Data Sources End Products Responsi b-ilities Timing
Hypothesis should be
1. A best guess answer to each sub-issue

2. A forcing device for developing analyses, but not a prejudged answer
Example
3. Chosen to challenge important existing assumptions or biases (eg adopt a different world view)

Teams should select analyses that test the hypothesis and for which data sources can be found
Thinking Map
Issues SubIssues Hypothesis
Analysis Activities required to prove or disprove the hypothesis in the prior column
Data Sources The source ormeans of obtaining the data required to complete the analysis Trade journals Interview Managers (names) Competitors (name) Customers (names) Financial Data Internal at (specify) Annual reports (years) Trade associations
End Products
Responsibilities
Timing
Description
Analysis and data sources should: 1. Prove or disprove the hypotheses
Example
Identify manufacturing practices of industry leaders Compare with our practices Develop pro forma financial statements with and without manufacturing changes Estimate DCF value
2.
Draw on information:
That is objective rather than subjective From reliable sources
3.
Be feasible based on existing information, staff, time, and budgets

Explicitly defined end products, responsibilities and timing should serve as an analytical guide for the team and a scheduling and management tool for the project leader
Thinking Map
Issues Description End products should: 1. Establish explicit objectives for team members performing analyses SubIssues Hypothesis Analysis Data Sources End Products A description of the end product to be delivered Responsi b-ilities
The person who will obtain the data, undertake the analysis and generate the end product
Timing
The time required (in days or weeks) to gather the data, complete the analysis, and generate the end product
2.
Serve as a check that analyses, once completed, support a coherent presentation

Aid managing consultant in preparing advance draft of presentation Be strategically assigned to a person or persons and have an estimated time for completion Cash flow forecast and estimated value of changes
Example
3.
Bach associate (name) Business unit manager (name)
4.
2 weeks after developme nt of list of potential manufacturing improvements

D. The Bottom Up Approach to Creating Logical Groupings The Bottom Up approach to creating logical groupings is to end with a MECE structure, but to begin with a laundry list of issues which may be obtained from interviews / workshops etc
This approach is powerful in developing insight as it forces the identification of the common characteristics of what may otherwise have been considered disparate issues A MECE structure may be created as the issues are progressively grouped and raised up levels of abstraction The limitation of this approach is need to overcome organisational noise and identify the core ideas
In a Bottom Up approach a laundry list of issues is collected from workshops, interviews etc with stakeholders

The laundry list is group according to common characteristics
Complaint
1. Bad timing
2. Poor data
Buyers want reports with better formats Buyers want exceptions highlighted Buyers do not want to do manual calculations
3. Unhelpful format

A logic tree can be constructed to test MECE thinking
The sales and inventory system produces an inadequate monthly report
Bad Timing
Poor Data
Unhelpful Format

The limitation of this approach is need to overcome organisational noise and identify the core ideas
In the previous slides we saw that there were eight issues but only three ideas In an live situation many of these issues may be considered noise, symptoms of a problem / opportunity The key task therefore is to distinguish between the noise and the core idea that it may infer
Making the Bottom Up approach effective therefore is dependent on the process of aggregation of the multitude of issues into a small number of core ideas from which to structure your thinking
Managing the movement of ideas between levels of abstraction is a powerful device for identifying exactly what you are talking about
The objective is to partition a big idea or problem / opportunity into its smaller components (or vica versa) making the idea easier to understand or the problem / opportunity easier to solve The basic idea behind this is that at some level either the problem / opportunity or its solution becomes relatively clear
Issues:
1. 2. 3. The size of the market (volume) Is static Our share of the market is static Competitive forces are pushing prices down
Up One Level:
Price and volume are elements of revenue, and the issues suggest that current and potential revenue is declining
Core Idea:
The market is unattractive

E. Types of Groupings
The three ways by which the mind can group ideas are: A. B. C. Structural Order is used when you are trying to describe a real or conceptual object, picture, diagram or process Degree Order is used when issues or ideas are classified as being alike because they possess a characteristic in common Time Order is used when the ideas exhibit cause and effect such steps within a process or system
If you cannot find one of these orders in a grouping, it tells you that the ideas do not relate logically, or that your thinking about them is incomplete
The use of logical grouping is essential to insight development because it enables you to comprehend the inter-relationships between ideas

A.
Structural Order is used when you are trying to describe a real or conceptual object, picture, diagram or process
Structural order, at its simplest, means that you will describe the pieces of the object, picture, diagram or process as they appear
To comprehensively describe the entire thing you have to describe all of its components
To clearly and accurately describe each of the components you have to describe them independent of one another The concept of MECE (mutually exclusive and collectively exhaustive) is the test of whether both of these things have been done
Structural order, at its simplest, means that you will describe the pieces of the object, picture, diagram or process as they appear
Example - Diagram of a car

The car can be explained by describing the:
body panelling; the windows; and the wheels
Once there has been a structural breakdown you may look for common characteristics between the components to develop insight. For example if the body had dents, the windows were cracked and the wheels were worn you may conclude that the car was old. This is degree order which we will look at next It should be noted that having created a MECE breakdown, you may move to looking for degree order insight with the knowledge that the imposition of structural order has permitted you to check for flaws and omissions

B.
Degree Order is used when issues or ideas are classified as being alike because they possess a characteristic in common
Degree order is the order imposed upon a grouping when it brings together a set of things you have classified as being alike because they possess a characteristic in common Presentation of degree order grouping is always the strongest first ie: the idea or issue that most possesses the common characteristic

Example - Problems with a Monthly Report

Buyers are unhappy with the sales and inventory system reports
Note: This is what is referred to as a laundry list. Ie: a random list of ideas that has not been pre-sorted to enable comprehension by the reader

Degree order example reworked in common characteristic groupings

Complaint
1. Bad timing
2. Poor data
Buyers want reports with better formats Buyers want exceptions highlighted Buyers do not want to do manual calculations
3. Unhelpful format

Example Rewritten:
The sales and inventory system produces an inadequate monthly report It contains unreliable data It presents it in an unwieldy format It is issued too late to permit action

The order that the groupings are presented in reflects a process, and the process is always dependent upon the problem / opportunity or question
Question
Why does the system produce a useless monthly report?
Question
Why do buyers hate this report?
Question
How are we going to fix the problem?
Answer Answer
2. It gathers unreliable data 3. It presents it in an unwieldy format 1. It is issued too late to permit practical action
1. It comes late 3. When they get it they cant find anything in it 2. When they find it, it is wrong
Answer
3. Decide the data we want and how it should be laid out 2. Make sure that the data included is reliable 1. Make sure we send it out on time

Exercise
Use degree order to group the following list of issues Sort the groups into a logical order that answers the question, why is central Auckland becoming a less attractive place to live?
The causes of central Aucklands decline are many and complex, and include: Wage rates are no different to the rest of the country A high crime rate High rent, energy and land costs The centres of economic concentration are spreading beyond the CBD Boy racers causing chaos on the weekend Traffic congestion that forces up transportation costs Technological advancements make working from home an alternative

Exercise
Central Auckland is becoming a less attractive place to live because: 1. 2. 3. It is dangerous (2, 5) Costs have become very high (1,3,6) Attractive alternatives exist (4,7)
Note that this may be the order for provided by parents, whereas a university student may put the order 2, 3, 1

C. Time Order is used when the ideas exhibit cause and effect such steps within a process or system
The complexity of this method of grouping lies in distinguishing cause from effect, particularly when there exist many levels of cause and effect The best way to distinguish cause and effect is to put yourself in the process that you are writing about. Ie: visualise what action you must take before you can take the next, or whether you must take it in order to achieve the next Note that the summary of a set of actions is always the effect of carrying out those actions

Example activities within a project plan

The following steps would be undertaken in Phase 1: 1. Interview key management and supervisory personnel 2. Trace and document transactions and workflow 3. Identify all critical functions 4. Analyse organisation structure 5. Understand services and performance measures 6. Assess performance levels of business functions 7. Identify problems and causes 8. Identify and justify potential areas for productivity improvement

Example activities within a project plan (rewritten):

In Phase 1 we will identify potential opportunities for productivity improvement: (note the summary is effect of actions) 1. Determine the critical functions of the business (3) Interview key management and supervisory personnel (1) Trace and document transactions and workflow (2) 2. Identify weakness in performing those functions (7) Specify organisation structure (4) Determine services and performance measures (5)
Assess performance levels (6)

3. Recommend practical ways to change (8)
Exercise Use Time Order to Create a Grouping of Actions
Strategic planning involves the recognition of a timing cycle: Perception of need
High cash generation

Slower growth and the onset of maturity Development of strategy for creating responsive product/service Market acceptance and high growth Decline/decay Implementation
Tip: ask yourself what are these issues really inferring?

Exercise - Answer
Strategic planning involves the recognition of a timing cycle: 1. 2. 3. 4. 5. Perception of need Development of strategy for creating responsive product/service Implementation of the strategy Assessment of market reaction Change of strategy to match the reaction

F. Deductive and Inductive Logic

Deductive logic allows ideas, or groups of ideas to be presented as a series of successive steps based on reasoning that leads to a therefore conclusion Inductive logic is based on grouping things that are similar in some way and point to a general conclusion

Deductive logic allows ideas, or groups of ideas to be presented as a series of successive steps based on reasoning that leads to a therefore conclusion
I fly because I am a bird
Birds fly
I am a bird
Therefore I fly
A statement about a situation that exists
A statement about a related situation that exists at the same time but related to the first because it comments on the subject or its predicate
The implication of the two statements existing at the same time
Deductive Examples
Men are mortal Socrates is a man
Therefore Socrates is mortal
Volume increases as a result of doing four things well
Your present structure makes it impossible for you to do any of these things well
Therefore you should correct your present structure
Any company that meets these three criteria is worth buying
Company A meets these three criteria
Therefore Company A is worth buying
It should be noted that sometimes putting every step of reasoning may be too pedantic. The answer is to chain two or more arguments together. This is acceptable if the audience will grasp and agree with the missing steps
The deductive form can vary
Peking is relaxing its attitudes for deliberate foreign policy purposes Statement
This return to normal diplomacy could tilt power balances in the Far East Comment on the Statement
In the fact of such changes, the US must stop pretending that China does not exist Therefore
Scientists are happy to agree to new ideas when they are simply an extension of old ones Statement
But they will resist if it means changing the structure of their thought Comment on the Statement
Atomic physics did mean changing the structure of their thought Comment on the Statement
Therefore, they did not readily accept atomic physics Therefore

The deductive form can vary - continued
A soft drink companys bottlers were thought to have a lot going for them Statement
Based on this assessment analysts predicted earnings growth Comment on the Statement
As a result of this prediction, the stock price rose Therefore
This led to a spate of long-term buy recommendations Therefore
Under central state planning, the state alone will decide who is to have what
Thus, the only power worth having is a share in the existing power
Therefore, the solution to economic or social questions will depend exclusively on who wields the power
Statement
Therefore
Therefore

Inductive logic is based on grouping things that are similar in some way and point to a general conclusion
Poland is about to be invaded by tanks
French tanks are at the Polish border
German tanks are at the Polish border
Russian tanks are at the Polish border
1. Define the ideas in the group 2. Look for similarity in subject 3. Draw inference based upon similarity

Deductive and Inductive Logic The Difference
If you are thinking deductively, the second point will always comment on the subject or predicate of the first. If it does not you should be able to classify it by the same plural noun (tanks) to test that you have a proper inductive grouping If neither test is positive, logical argument does not exist

Section V - Constructing a SIP Document Logic in Writing
Pyramid Structures The Vertical Relationship The Horizontal Relationship
The skill of writing is to create a context in which other people can think. - Edwin Schlossberg

A. Pyramid Structures
If you accept that the human mind automatically tries to sort information into groups and order to comprehend it, then You must group and order ideas in order to communicate them effectively Grouped ideas form a pyramid at various levels of abstraction Therefore, the clearest written documents present their information top down and in a pyramidal structure
Within a pyramid of ideas there are two logical orders: the vertical order and the horizontal order
The key to ensuring logical clarity is to place ideas within a pyramid form and test the logical orders

Pyramid structures are useful for testing levels of abstraction because they break down and stratify ideas into progressively greater detail
ROCE
Assets
EBIT
Fixed Assets
Working capital Shareholders funds
Costs
Revenue
Fixed
Variable
Price
Volume
To ensure that the tree is explicitly logical, it must obey two rules: 1. 2. 3. Ideas at any level of the tree must be summaries of the ideas grouped below them Ideas in each grouping must be of the same kind and at the same level of abstraction Ideas in each grouping must be logical (deductive or inductive) order
B. The Vertical Relationship Vertical order within a group of ideas highlights the levels of abstraction by being summaries of the ideas grouped below thereby positioning the reader/audience to respond logically to your ideas
Pigs should be kept as pets
Why?
They are beautiful

In what way?
They could be bred to fascinating variations

How?
They are fat

How is fat beautiful?
They are typically English

How is English beautiful?
In types
In size
In personality
In functions
They have great curves
They create modesty in the owner

How?
They are linked to the land
They symbolise that power is not inconsistent with kindness
So English they deserve to be the national symbol
Like the chalk downs
Like the beech tree

Page 74

B. The Horizontal Relationship

There must always be a specific reason for the order by which ideas in each grouping are presented. If there is not, you have not thought about them:
You may have missed something because your thinking is not structured It will be more difficult for your audience/reader to comprehend what you are trying to communicate
1. 2. 3. 4.
Ideas may be order in four ways:

Deductively (major premise, minor premise, conclusion) Chronologically (first, second, third) Structurally (Sydney, Melbourne, Canberra) Comparatively (first most important, second most important, etc)

Section VI - Communicating with SIP

A. The Concept of Simplicity B. The Stages of Communications Development Stage 1 - Build your story line Stage 2 - Define your audience strategy Stage 3 - Develop your end product

A. The Concept of Simplicity The concept of simplicity

Simplicity in communication

The Concept of Simplicity

Simplicity is a value Organisations are full of noise, therefore value may be added by simplifying, not complicating (what justification is there for making something complex when it could be simple) a situation Dealing with complexity is an unnecessary waste of time, attention and mental energy
Simplicity before understanding is simplistic; simplicity after understanding is simple (someone who dismisses something as being too simple may simply be demonstrating his or her ignorance of the subject)
Oversimplification means you have simplified the matter to much and left out important aspects Simplicity is only easy in hindsight
Simplicity in Communication
The main aim of communication is clarity and simplicity therefore a large effort should be expended to achieve this end Communication is always understood in the context and experience of the receiver no matter what was intended, therefore the choice of language must take this into account
Complexity can lead to confusion, however too simple a message might lead to mis-interpretation
Oversimplification means you have simplified the matter to much and left out important aspects
P99 pyramid principle

B. The Stages of Communications Development

Stage 1 - Build your story line - What questions are you addressing? What are the answers? Does the answer add value? - How should you state your main conclusion? What is the best way to support it? Does your story avoid repetition, but cover all the bases? Stage 2 - Define your audience strategy - What are your audiences needs and concerns? What do you want your audience to do or think as a result of your presentation? Stage 3 - Develop your end product - What do you need to say to set the scene? How can you ensure that your audience stays with you? Where would visuals help? How can you present your audience with a strong conclusion?
Stage 1 - Build Your Story Line

1. Identify your conclusions and recommendations
2.
3. 4.
Write a detailed final draft story

Decide the governing thought Write your front page

1. Identify your conclusions and recommendations

Conclusions are key messages about the subject Limit your conclusions to between 3 and 5 - anymore and you will find that a few of them are at too low a level of abstraction Recommendations are the actions to be taken based upon your conclusions Each conclusion may consist of between 3 and 5 recommendations - anymore and you will find that a few of them are at too low a level of abstraction At this stage your story should have shifted from: Situation, Implication. To Situation, Implication and Proposal

Successful presentations anticipate the audiences questions and present the answers in a logical and compelling format
Spend some time with your team identifying the range of questions you are likely to encounter. Think about your answers: are they specific enough? Can you back them up with data on the spot? Does your answer further the knowledge of your audience? Will your answers provide enough information to make a decision? The example below is a list of questions and answers anticipated for the presentation on the evaluation of the auto parts market EXAMPLE
Question What are the most promising opportunities in the auto parts market? Answers Establish an supply accessories boutiques at high value auto dealerships Establish clearinghouse for hard-toobtain specialty parts Establish wholesale facility for aftermarket discount parts Central point of purchase for highvalue autos is dealership; currently dealerships are very marginally stocked with highly profitable accessories
Value Added Gives broad overview over the teams recommendations
Why does the high-value auto parts market warrant our involvement?
Lets the audience know the conclusions which have led to your recommendations
Order the recommendations, conclusions, and facts supporting your governing thought into a pyramid, where the point at the top reflects the highest level of generalisation and the tiers at the bottom carry the supporting details
Governing thought Recommendations
Establish clearinghouse for hard-toobtain specialty parts Establish and supply accessories boutiques at high-value auto dealerships Establish wholesale facility for aftermarket discount parts There are significant opportunities in the auto parts distribution market EXAMPLE
Conclusions
Auto dealershi p do not fully exploit their marketing opportunities Owners of highvalue autos prefer OEM accessor ies Existing parts retailers do not offer full assortm ent of OEM accessor ies No central clearing house currently exists; consumer s are on their own Profit margins on out of producti on parts are extraordinary Busines s volume would justify investme nt Current after market parts distributio n highly fragmente d and inefficient Discount parts not branded consumers confused by price/ quality trade-off Opportunity exists to consolidat e discount market and develop consumer trust
Eventually, this pyramid should contain a complete and mutually exhaustive list of your conclusions and the most relevant supporting evidence. In your presentation, resist the temptation to keep your audience in suspense; start your presentation with your governing thought, rather than leading up to it.
2. Write a detailed final draft story

You have successfully structured the problem / opportunity, hurdled the data wall, and arrived at crisp conclusions and recommendations, but you are not yet done. Your team now has to decide how to present this complex material to your audience It is likely that you will have only developed a word flow for the high level summary of your story (although this may be supported by your pyramid of issues and ideas) Now is the time to write out the story in full so that you are able to view it in its entirety. Remember the logic must come before the words, therefore, if your preparation has been well structured, the words will come
3. Decide the governing thought

The governing thought is the main message that you want your audience to carry away with them The governing thought is a message at a level of abstraction at which all of the issues that make up the problem / opportunity are covered

4. Write Your Front Page

The front page of your SIP document is the highest level summary of the document The front page will have at least 3, but no more than 5 leads Situation 1 to 2 leads Implication - 1 to 2 leads Proposal 1 lead

Step 2 - Define Your Audience Strategy

The amount of incorporation required before a presentation is dependent upon the relationship of the audience to the topic of the presentation and any related decisions The content of the presentation must deal to the needs of the audience ie: answer the questions that they would ask Your audiences profile and its expected receptivity toward your recommendations should determine the structure and style of your presentation Given your audience profile and receptivity, you can chose among a number of formats for your presentation
The amount of incorporation required before a presentation is dependent upon the relationship of the audience to the topic of the presentation and any related decisions
Level of Alignment Stand Ownership Support Description The individual will do anything to make it happen The individual is completely aligned The individual is not completely aligned, but will do anything to help The individual will support you, as long as they continue to agree with what you are saying The individual openly disagrees with you The individual is working against you behind the scenes The individual does not care
Buy-in In Principle
Resistance Sabotage Apathy
The content of the presentation must deal to the needs of the audience ie: answer the questions that they would ask
Staff Member 1.
Area of Interest
Likely Issues
Deal with In Presentation
2.
3.

Your audiences profile and its expected receptivity toward your recommendations should determine the structure and style of your presentation
AUDIENCE ANALYSIS CHECKLIST Overall profile 1. Nature of your relationship with audience 2. Audiences general attitude toward you Formal Informal Friendly Hostile Neutral Unknown Concepts Facts/analysis Actions/recommendations Oral/visual presentations Informal discussions Full, written documents Receptivity to this communication 4. Audiences role in action on communication 5. Audiences preparation for communication Primary decision maker Opinion leader Other Thorough knowledge of subject Limited knowledge of subject No knowledge of subject Very interested Somewhat interested Neutral Indifferent Willing to change Somewhat resistant to change Committed to not changing Support Cover important or controversial points thoroughly; do not belabor the obvious - or past mistakes Style Reflect the tenor of the organisation in your language and manner
IMPLICATIONS FOR COMMUNICATIONS DECISIONS

Mode Think carefully about the range of options available Unless there is a good strategic reason not to, choose a medium that fits with the style of the audience A close working relationship often makes informal communications appropriate With a resistant audience, a series of meetings may be needed to air concerns and build a case for change An action-oriented audience is less interested in quantitative detail than an analytical oriented audience The primary decision maker needs only his own concerns addressed; an opinion leader needs enough information to persuade others; in general, higher levels of management need less detail than lower levels Earn the right to be informal - use humour with caution A friendly audience may welcome a collaborative tone; a hostile audience may require total objectivity
3. Audiences preferences
6. Audiences probably response to this communication
Agreement Disagreement Neutral

Given your audience profile and receptivity, you can chose among a number of formats for your presentation
Profits
Outline
Memo Lap visual
Exhibit Deck
Discussion Outline (With Or Without Exhibits) Stress overall story line
Memorandum
Overhead Presentation
Prose Final Report
Videotape
Computer
Primary objectives
Confirm data; agree on interpretation
Explain point of view on given issue
Build understanding of argument, gain agreement to recommendations
Ensure understanding of decisions, provide record of engagement
Convey images; show rather than tell
Assess analytic results/ implications
Size of audience
1-10 1-10
Any size
5-25
Any size
1-25 Can be high impact, worth 1,000 words Can communicate consistent message to many audiences
1-3 (more with big screen)
Benefits
Generates discussion
Highlight potential problems, key analyses required
Provides snapshot of logic

Facilitates discussion Gets key points across quickly May lead to unsupported assertions; excessive sublevels
Allows amplification of reasons, nuances implications

May obscure logic if overwritten Is inappropriate for on-the-spot discussions
Provides scope for extensive analytical support
Communicates to wide audience
Allows real time problem solving. What ifs?
Helps control meeting Inhibits discussion May provide poor record Can be dull, overwhelming Page 92
Pitfalls/ drawbacks
Provides no synthesis; is suitable only for working sessions
Is time consuming, expensive to prepare May not be read
May be expensive Inhibits discussion
Provides no synthesis, is suitable only for working sessions

Stage 3 - Develop your end product The logic pack is the vehicle through which you manage your thinking and analysis, it is not a suitable vehicle for communication
A well-planned presentation includes a hierarchy of data and conclusions supporting a governing thought; features fluid transitions within, and between, tiers of the pyramid, and is framed by an introduction and an ending A presentation pack should be simple and easy to understand, and as such graphs an models are more effective communicators than text and tables

The logic pack is the vehicle through which you manage your thinking and analysis, it is not a suitable vehicle for communication
Front Page Governing Thought Title Page Lead A Situation Lead Solution Lead Lead B Lead C Implication Lead Lead A Lead B Lead A Lead B Situation Lead Lead A
Complication Lead Lead C
Lead B
Proposal Lead Lead A Lead B
Lead A
Lead B

A well-planned presentation includes a hierarchy of data and conclusions supporting a governing thought; features fluid transitions within, and between, tiers of the pyramid, and is framed by an introduction and an ending
INTRODUCTION
Title
Governing thought
Transitions Recommendations
Conclusions Supporting Evidence
ENDING
The flow of your presentation greatly benefits from the use of introductions, endings, and careful transitions between sections
Introductions
Introductions serve to set the context for your audience, to remind them of your teams original mandate, and to get their full attention; typically, and introduction has the following elements
State the situation - The task force was asked to look into opportunities in the auto parts market. Explain the relating complications or question The opportunities for out company involvement depend on 3 crucial factors: size of the market accessibility of the market cost/benefit analysis Summarise the solution - Our company will be able to profitably access a significant portion of the audio parts market Give a preview of the presentation: The teams findings will be presented in the following order
Transitions
Transitions link your ideas into a compelling story. Their function is to
Illustrate - For example, for instance, to illustrate Add - Moreover, in addition, furthermore, similarly, again, also, secondly, finally Contrast - On the other hand, nevertheless, despite, on the contrary, still, however, conversely, instead, but, yet
Endings
Endings serve to summarise your presentation and set the stage for future action; the main functions are to
Reinforce the main message and supporting conclusions - In summary, opportunities in the auto parts market are concentrated in the following 3 areas Provide perspective, e.g. Benefits from taking action: Developing an accessories business for high-value auto dealerships will position our company as an innovator in the auto parts distribution field top management role: Dedication at the highest levels of our companies to help auto dealers further expand their retailing operation swill help to build a successful trust-based relationship Urgency and timing: Our company should immediately develop a specialty parts clearing house to take advantage of consumers dissatisfaction Outline next steps: To take advantage of this situation, these actions will be necessary

A presentation pack should be simple and easy to understand, and as such graphs an models are more effective communicators than text and tables
How to do it wrong A better approach
Better still

Section VII - Constructing a SIP Document and Presentation
A. The Front Page B. Subsequent Pages C. Graphing

A. Contents
Contents
20 font bold
16 font bold
Situation Subject title #1
16 font regular
Subject title #2etc

Implication Subject title #3 Subject title #4etc Proposal Subject title #5 Subject title #6etc

B. The Front Page
20 font bold
Smoothing out bill volumes across the calendar month will reduce costs by $4m pa, improve the customer experience and eliminate up to $6m pa in lost 16 font 16 font interest
Situation
bold
regular
Bill production has 90 bill cycles per month that are scheduled around systems constraints and contractual arrangements
The volume of accounts distributed varies by up to 50k per day and the timing of expected payments varies from 15 to 29 days Line spacing
The variation in volumes contributes to variation in workflows for both the front and back office which impact customer satisfaction and costs by reducing service levels at peak times and requiring a buffer to be built into the schedule to protect against unexpected variance which adds 10% ($4m pa) to 2, staff costs down, 10 Windings 6 rows
Implication
maximised to use page
columns payment from the means left The variation in expected that 85% of all payments are received after 16 days driving a capital cost of $6m pa
Smooth out bill volumes across the calendar month to reduce the variation of workflows, bullet reduce costs and improve customer satisfaction Enforce the 15 day payment period
Proposal
1cm tab indentation from
C. Subsequent Pages
Situation
20 font bold 18 font bold
Bill production has 90 bill cycles per month that are scheduled around systems constraints and contractual arrangements Blah blah blah Blah blah blah
16 font regular
D. Graphing
Situation Sales revenue peak in the third quarter
14 font regular
100 90 80 70 60 50 40 30 20 10 0 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr
20.4 38.6 30.6 27.4 20.4 34.6 31.6
Quartlerly Sales Revenue (2002)

90
16 font regular
Revenue ($'000)
10 font regular
No unnecessary visual noise such as gridlines
Quarters
12 font regular
East
West
Must have a legend

I keep six honest serving men, (they taught me all I know); their names are What and Why and When and How and Where and Who. - Rudyard Kipling
EQuest Consulting contact details:

Business Development Manager Tel: 02 9900 9900
EQuest Consulting ABN: 57 092 959 763 www.eqc.com.au info@eqc.com.au
Sydney Melbourne Level 8, 153 Walker Street St Kilda Road Towers, Suite 443, Level 4 Page 104 North Sydney NSW 2060 1 Queens Road, Melbourne VIC 3004 Logic in Thinking and Writing How To Guide Version 1.2 T +61 2 9900 9900 F +61 2 9900 9999 T +61 3 9863 8466 F +61 3 9863 8467

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Logic in Thinking and Writing How to Guide

Copyright EQuest Consulting Pty Ltd 2006

Page 2 Logic in Thinking and Writing How To Guide Version 1.2

Section I Thinking and the Thought Process

A. What is Thinking? B. What Makes Thinking Difficult

C. Approaches to the Thought Process

Page 4 Logic in Thinking and Writing How To Guide Version 1.2

Page 5 Logic in Thinking and Writing How To Guide Version 1.2

B. What Makes Thinking Difficult?

C. Approaches to the Thought Process

Natural for Few People

Page 7 Logic in Thinking and Writing How To Guide Version 1.2

D. The Unity Thought Process

Page 8 Logic in Thinking and Writing How To Guide Version 1.2

Section II SIP, A Vehicle for Thinking and Communicating

Page 9 Logic in Thinking and Writing How To Guide Version 1.2

Page 10 Logic in Thinking and Writing How To Guide Version 1.2

B. Situation, Implication and Proposal

Page 11 Logic in Thinking and Writing How To Guide Version 1.2

The implication is the business impact of a particular situation

The implication should always have a financial value

Page 13 Logic in Thinking and Writing How To Guide Version 1.2

Page 15 Logic in Thinking and Writing How To Guide Version 1.2

C. How Is a SIP Used?

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Page 17 Logic in Thinking and Writing How To Guide Version 1.2

Why do you reiterate?

Reiteration is the key ingredient of value creation

70% 60% 50% 40% 30% 20% 10% 0%

Page 18 Logic in Thinking and Writing How To Guide Version 1.2

Logic in Thinking and Writing How To Guide Version 1.2

Ghost Pack Structure

Situation Lead Lead A Lead B Lead C

Implication Lead Lead A Lead B

Page 21 Logic in Thinking and Writing How To Guide Version 1.2

3. The SIP is the basis of all presentations

Page 22 Logic in Thinking and Writing How To Guide Version 1.2

Section III Unity and SIP

Section IV - Constructing a SIP Document Logic in Thinking

C. The Top Down Approach to Creating Logical Groupings

I might be wrong, but I am not confused - Anonymous

Page 24 Logic in Thinking and Writing How To Guide Version 1.2

A. The Importance of Logic in Thinking

What We Use to Help Us

Tools & Techniques

We create meaning only with relativity

MECE Structural, Time and Degree Orders

We draw conclusions by associating ideas

Deductive and Inductive Logic Pyramid Principle SIP

Example - Problems with a Monthly Report

Page 27 Logic in Thinking and Writing How To Guide Version 1.2

Report frequency is inappropriate Inventory data comes to late

Buyers want reports with better formats

Page 28 Logic in Thinking and Writing How To Guide Version 1.2

B. MECE Mutually Exclusive and Collectively Exhaustive

Page 29 Logic in Thinking and Writing How To Guide Version 1.2

Page 30 Logic in Thinking and Writing How To Guide Version 1.2

C. The Top Down Approach to Creating Logical Groupings

Page 32 Logic in Thinking and Writing How To Guide Version 1.2

How can ABC improve ROI?

Company X must increase the market share of its core product

The best way to reverse declining profit is to increase market share

Will increasing market share require large price reductions?