Organization Design

Many leaders are rethinking the design of their organizations. They

recognize that organization design can be a powerful way to boost
performance and keep up with ever-changing markets. Yet many
reorganization efforts fail.
More than half of companies in fact rate their reorganization initiatives as “mostly”
or “very” unsuccessful. BCG has identified six key factors that distinguished the
successes from the failures. Companies that employed these factors have a significantly
higher chance of experiencing faster growth and higher profits than their peers :

 Agile ways of working

 A value-adding corporate center
 Clearly delineated profit and loss (P&L) responsibilities
 A flat management structure with a strong frontline focus
 Effective use of shared services
 Strong support for people and collaboration

BCG incorporated these success factors into our award-winning approach to

organization design.

BCG’s Approach to Organization Design: Smart Design

for Performance

We focus on shaping employee behavior: the underlying driver of a company’s

performance. The Smart Design for Performance approach uses a wide variety of
organizational levers (see graphics below) in combination and creates a conducive
and engaging context for employees so that it is in their own individual interests to
adopt and develop the desired behaviors. The context changes the way that people
act, interact, and make decisions, resulting in higher organizational performance.
 Strong organization design relies on holistic design and alignment of four major design
elements to shape target behaviors.
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Implementing Organization Design

When it comes to reorganizing, companies have little room for error. The following
six factors are critical to flipping the odds of success in a reorganization:
1. Synchronize design with strategy. Regardless of the precipitating factor,
the reorganization must align with the organization’s strategy and business
priorities in the simplest way possible.
2. Clarify roles and responsibilities. Of all the organizational capabilities most
required for a successful reorganization, this set—clarifying roles and
responsibilities, assigning accountabilities, and determining decision rights
—is one of the most difficult to get right.
3. Deploy the right leaders and the right capabilities. In reorganizations, a
common pitfall is tailoring the redesign around the individual capabilities
of a few important executives. Another pitfall is overlooking the
capabilities required for the new design to succeed.
4. Design layer-by-layer, not just top-down. A cascading approach to design
puts companies in a better position for success. Address the needs of each
layer, according to consistent design principles, rather than using a top
down-only design approach.
5. Lower execution risk. Execution is by far the most important capability for
achieving a successful reorganization—applying a step-by-step, disciplined
approach to implementation is crucial to avoid missteps.
6. Don’t wait for a crisis to reorganize. Reorganizations that take place prior
to a crisis have a much better chance of success. During a crisis, the odds
of a successful reorganization are only 50/50.

Organization Design for Today’s Needs

The Smart Design approach, paired with our robust set of tools and experts, can help
ensure success in reorganization efforts. Learn more about the solution that
synchronizes structure with strategy and optimizes the organization for shaping
target behaviors and boosting performance.

LEARN MORE ABOUT ORGANIZATION DESIGN

  Smart Design for Performance
 Boosting Performance Through Organization Design
 Technology-Enabled Reorganization: Unlocking the Full Potential of Organizational
Transformation
 Flipping the Odds for Successful Reorganization
 Designing the Corporate Center: How to Turn Strategy into Structure
 How Digital Can Turbocharge Shared Services
 Breaking Free of the Silo: Creating Lasting Competitive Advantage Through Shared
Services

EXPERTS IN ORGANIZATION DESIGN

Andrew Toma
Senior Partner & Managing Director
London

 Large-scale reorganization
 Agile transformation
 Digital shared services
 Agile delayering

Fabrice Roghé
Senior Partner & Managing Director
Düsseldorf

 Organization design
 Digital shared services
 Digital organization set up
 Agile transformation

Steve Maaseide
Senior Partner & Managing Director
Washington, DC

 Organizational transformation
 Operating-model redesign
 Merger integration
 Organization and governance for digital

STRATEGIC PLANNING TOOLS

Strategic planning may be characterized as a systematic effort to produce fundamental
decisions and actions that shape and guide what a business organization is, what it
does, and why it does it. The objective of strategic planning is to develop a map by
which to manage an organization's positioning.
Although some would suggest that strategic planning has lost some of its effectiveness,
most managers continue to recognize the need for effective strategic planning and
implementation. While strategic planning requires a significant amount of time and can
be quite frustrating, if done properly, it can enable a firm to recognize its most effective
position within its industry.
There are a variety of perspectives, models and approaches used in strategic planning.
The development and implementation of these different tools depend on a large number
of factors, such as size of the organization, nature and complexity of the organization's
environment, and the organization's leadership and culture.
Five strategic planning tools are presented below: the Boston Consulting Group Matrix;
the GE Market Growth/Market Share Matrix; SWOT Analysis; Porter's Generic
Competitive Strategies; and Porter's Five Forces Model.

BOSTON CONSULTING GROUP MATRIX

In the late 1960s the Boston Consulting Group, a leading management consulting
company, designed a four-cell matrix known as BCG Growth/Share Matrix. This tool
was developed to aid companies in the measurement of all their company businesses
according to relative market share and market growth. The BCG Matrix made a
significant contribution to strategic management and continues to be an important
strategic tool used by companies today. The matrix provides a composite picture of the
strategic position of each separate business within a company so that the management
can determine the strengths and the needs of

Figure 1 
Market Growth/Share Matrix

all sectors of the firm. The development of the matrix requires the assessment of a
business portfolio, which includes an organization's autonomous divisions (activities, or
profit centers).
The BCG Matrix presents graphically the differences among these business units in
terms of relative market share and industry growth rate. The vertical axis represents in a
linear scale the growth rate of the market in which the business exists (see Figure 1).
This is generally viewed as the expected growth rate for the next five years of the
market in which a particular business competes. The values of the vertical axis are the
relevant market growth rates (i.e., 5 percent, 10 percent, 15 percent, 20 percent, etc.).
Usually a 10 percent cut-off level is selected in order to distinguish high from low market
growth rate (a 10 percent value corresponds to doubling current experience in the next
five to seven years).
The horizontal axis represents in a logarithmic scale the market share of a business
within a firm relative to the market share of the largest competitor in the market. For
example, Company A may have a 10 percent market share and Company B, the
leading competitor, holds 40 percent of the market. Company A's market share relative
to Company B's market share is 25 percent, or .25×. If Company A has a 40 percent
share and Company B has a 10 percent share, Company A's market share is 400
percent, or 4.0×.
Relative market share is an indicator of organization's competitive position within the
industry, and underlies the concept of experience curve. Thus, business organizations
with high relative market share tend to have a cost leadership position.
Each of a company's products or business units is plotted on the matrix and classified
as one of four types: question marks, stars, cash cows, and dogs. Question marks,
located in the upper-right quadrant, have low relative market share in a high-growth
market. These businesses are appropriately called question marks because it is often
uncertain what will happen to them. Careful examination by management can help
determine how many resources (if any) should be invested in these businesses. If
significant change can increase relative market share for a question mark, it can
become a star and eventually gain cash-cow status. If relative market share can not be
increased, the question mark becomes a dog.
The upper-left quadrant contains stars, businesses with high relative market share in
high-growth markets. These businesses are very important to the company because
they generate a high level of sales and are quite profitable. However, because they are
in a high growth market that is very attractive to competitors, they require a lot of
resources and investments to maintain a high market share. Often the cash generated
by stars must be reinvested in the products in order to maintain market share.
When the market growth slows down, stars can take different paths, depending on their
abilities to hold (or gain) market share or to lose market share. If a star holds or gains
market share when the growth rate slows, stars become more valuable over time, or
cash cows. However, if a star loses market share, it becomes a dog and has
significantly less value (if any) to the company.
The lower-left quadrant contains businesses that have high relative market share in low-
growth markets. These businesses are called cash cows and are highly profitable
leaders in their industries. The funds received from cash cows are often used to help
other businesses within the company, to allow the company to purchase other
businesses, or to return dividends to stockholders.
Dogs generate low relative market share in a low-growth market. They generate little
cash and frequently result in losses. Management should carefully consider their
reasons for maintaining dogs. If there is a loyal consumer group to which these
businesses appeal, and if the businesses yield relatively consistent cash that can cover
their expenses, management may choose to continue their existence. However, if a dog
consumes more resources than it's worth, it will likely be deleted or divested.
Strategic business units, which are often used to describe the products grouping or
activities, are represented with a circle in the BCG Matrix. The size of the circle
indicates the relative significance of each business unit to the organization in terms of
revenue generated (or assets used).
Although the BCG Matrix is not used as often as it was in past years, one big advantage
of the matrix is its ability to provide a comprehensive snapshot of the positions of a
company's various business concerns. Furthermore, an important benefit of the BCG
Matrix is that is draws attention to the cash flow, investment characteristics, and needs
of an organization's business units, helping organizations to maintain a balanced
portfolio.
Unfortunately, the BCG Matrix, like all analytical techniques, also has some important
limitations. It has been criticized for being too simplistic in its use of growth rate and
market share. Market growth rate is only one variable in market attractiveness and
market share is only one variable in a business's competitive position. Furthermore,
viewing every business as a star, cash flow, dog, or question mark is not always
realistic. A four-cell matrix is too simple because strategic competitive positions are
more complicated than "high" and "low".
Another disadvantage of using the BCG Matrix is that it is often difficult for a company to
sufficiently divide its business units or product lines. Consequently, it is difficult to
determine market share for the various units of concern.

GENERAL ELECTRIC MATRIX

In the 1980s General Electric, along with the McKinsey and Company Consulting group,
developed a more involved method for analyzing a company's portfolio of businesses or
product lines. This nine-cell matrix considers the attractiveness of the market situation
and the strength of the particular business of interest. These two dimensions allow a
company to use much more data in determining each business unit's position.
The key to the successful implementation of this strategic tool is the identification and
measurement of the appropriate factors that define market attractiveness and business
strength. Those individuals involved in strategic planning are responsible for
determining the factors. The attractiveness of the market may be based on such factors
as market growth rate, barriers to entry, barriers to exit, industry profitability, power of
the suppliers and customers, availability of substitutes, negotiating power of both
customers and members of the channel of distribution, as well as other opportunities
and threats.
The strength of a particular business may be based on such factors as market-share
position, cost placement in the industry, brand equity, technological position, and other
possible strengths and weaknesses. The development of General Electric (GE) Matrix
requires assessing the criteria to evaluate both industry attractiveness and business
strength. The calculation of scores for these dimensions is frequently based on a simple
weighted sum formula.
To consider this approach as a matrix analysis, market attractiveness is placed on the
vertical axis with the possible values of low, medium, and high (see Figure 2). Business
strength is placed on the horizontal axis with the possible values of weak, average, and
strong. A circle on the matrix represents each business unit (or product line). The size
(area) of each circle represents the size of the relevant market in terms of sales. A
portion of the circle is shaded to represent the market share of each business unit or
product line within the market.
 Figure 2 
GE Business Strength/Market Attractiveness

The nine cells of this matrix define three general zones of consideration for the strategic
manager. According to this approach, the first zone contains businesses that are the
best investments. These are units high in market attractiveness and strong in business
strength, followed by those that are strong in business strength and medium in market
attractiveness, and those that are medium in business strength and high in market
attractiveness. Management should pursue investment and growth strategies for these
units. Management should be very careful in determining the appropriate strategy for
those business units located in any of the three cells in the diagonal of this matrix.
The second zone includes those business units that have moderate overall
attractiveness and those units that have medium business strength and market
attractiveness, weak business strength and high market attractiveness, and strong
business strength and low market attractiveness. These businesses should be
managed according to their relative strengths and the company's ability to build on
those strengths. Moreover, possible changes in market attractiveness should be
carefully considered.
Those businesses that fall in the last zone are low in overall attractiveness; these are a
good investment only if additional resources can move the business from a low overall
attractiveness position to a moderate or strong overall attractiveness position. If not,
these businesses should be considered for deletion or harvest.
The GE Matrix may be considered as an improvement over the BCG Matrix. The major
advantage of using this matrix design is that both a business' strength and an industry's
attractiveness are considered in the company's decision. Generally, it considers much
more information than BCG Matrix, it involves the judgments of the strategic decision-
makers, and it focuses on competitive position.
A major disadvantage, however, is the difficulty in appropriately defining business
strength and market attractiveness. Also, the estimation of these dimensions is a
subjective judgment that may become quite complicated. Another disadvantage lies in
the lack of objective measures available to position a company; managers making these
strategic decisions may have difficulty determining their unit's proper placement. Too,
some argue that the GE Matrix cannot effectively depict the positions of new products or
business units in developing industries.
SWOT ANALYSIS MATRIX
One of the most widely used strategic planning tools is a SWOT (Strengths,
Weaknesses, Opportunities, Threats) analysis. Most companies use, in one form or
another, SWOT analysis as a basic guide for strategic planning. The worth of a SWOT
analysis is often dependent on the objective insight of those management individuals
who conduct the SWOT analysis. If management (or consultant management) is able to
provide objective, relevant information for the analysis, the results are extremely useful
for the company.
A SWOT analysis involves a company's assessment of its internal position by identifying
the company's strengths and weaknesses. In addition, the company must determine its
external position by defining its opportunities and threats.
Strengths represent those skills in which a company exceeds and/or the key assets of
the firm. Examples of strengths are a group of highly skilled employees, cutting-edge
technology, and high-quality products. Weaknesses are those areas in which a firm
does not perform well; examples include continued conflict between functional areas,
high production costs, and a poor financial position.
Opportunities are those current or future circumstances in the environment that might
provide favorable conditions for the firm. Examples of opportunities include an increase
in the market population, a decrease in competition and a legislation that is favorable to
the industry. Threats are those current or future circumstances in the environment,
which might provide unfavorable conditions for the firm. Examples of threats include
increased supplier costs, a competitor's new product-development process, and a
legislation that is unfavorable to the industry.
After a firm has identified its strengths and weaknesses, it should determine the
significance of each factor. A management team should review all strengths and
weaknesses to determine the level (minor or major) of each strength and weakness.
The importance (low or high) of each strength and weakness should also be identified.
As shown in Figure 3, the combination of level of performance and importance yields
four possibilities.
Cell 1 contains important areas in which the company is exhibiting poor performance.
When a company identifies these areas it becomes aware of the need to improve its
efforts in order to strengthen its performance. Important areas in which the company is
performing very well are located in Cell 2. A company should continue its current efforts
in these areas. Cell 3 contains unimportant areas in which the firm is performing poorly.
Since these areas are a low priority for the company, it need not pay a great deal of
attention to these areas. The last category, Cell 4, includes areas in which the company
is performing well, but which are unimportant. The firm may need to pull back some of
its efforts in this area, depending on how unimportant the area is to the overall picture.
In order to be most effectively used, opportunities and threats must also be classified.
One way to examine opportunities is to consider how attractive (low or high) an
opportunity is to a particular company. A business might also consider its probability of
success (low or high) in utilizing a particular opportunity. A company doesn't need to
pursue an opportunity that is not particularly attractive to it, nor does it need to pursue
an opportunity for which it does not possess the requisite
 Figure 3 
Classification of Strengths and Weaknesses

strengths. Threats should be evaluated according to their seriousness (low or high) and
their probability of occurrence (low or high). A company must pay much more attention
to a very serious threat that is quite likely to occur, than to a mild threat that is unlikely to
occur.
Careful determination and classification of a company's strengths, weaknesses,
opportunities, and threats provides an excellent way for a company to analyze its
current and future situation. It is not necessary for a company to take advantage of all
opportunities, nor is it necessary for a company to develop methods to deal with all
threats. Additionally, a company need not strengthen all of its weaknesses or be too
smug about all its strengths. All of these factors should be evaluated in the context of
each other in order to provide the company with the most useful planning information.

PORTER'S GENERIC 
COMPETITIVE STRATEGIES
Michael Porter has suggested a method of categorizing the various types of competitive
strategies. He identified two generic competitive strategies: overall lower cost and
differentiation. These strategies are termed generic because they can be applied to any
size or form of business. Overall lower cost refers to companies that can develop,
manufacture, and distribute products more efficiently than their competitors.
Differentiation refers to companies that are able to provide superior products based on
some factor other than low cost. Differentiation can be based on customer service,
product quality, unique style, and so on.
Porter also suggests that another factor affecting a company's competitive position is its
competitive scope. Competitive scope defines the breadth of a company's target
market. A company can have a broad (mass market) competitive scope or a narrow
(niche market) competitive scope. The combination of broad scope and narrow scope
with a low-cost strategy and differentiation results in the following generic competitive
strategies: cost leadership, cost focus, differentiation, and focused differentiation (see
Figure 4).
The implementation of these strategies requires different organizational arrangements
and control processes. Larger firms with greater access to resources typically select a
cost leadership or a differentiation
 Figure 4 
Porter's Generic Competition

strategy, whereas smaller firms often compete on a focus basis.

Cost leadership is a low-cost, broad-based market strategy. Firms pursuing this type of
strategy must be particularly efficient in engineering tasks, production operations, and
physical distribution. Because these firms focus on a large market, they must also be
able to minimize costs in marketing and R&D. A low-cost leader can gain significant
market share enabling it to procure a more powerful position relative to both suppliers
and competitors. This strategy is particularly effective in case of price-sensitive buyers
in the market and small possibilities to achieve product differentiation.
A cost-focus strategy is a low-cost, narrowly focused market strategy. Firms employing
this strategy may focus on a particular buyer segment or a particular geographic
segment, and must locate a niche market that wants or needs an efficient product and is
willing to do without the extras in order to pay a lower price for the product. A company's
costs can be reduced by providing little or no service, providing a low-cost method of
distribution, or producing a no-frills product.
A differentiation strategy involves marketing a unique product to a broad-based market.
Because this type of strategy involves a unique product, price is not the significant
factor. In fact, consumers may be willing to pay a high price for a product that they
perceive as different. The product difference may be based on product design, method
of distribution, or any aspect of the product (other than price) that is significant to a
broad market group of consumers. A company choosing this strategy must develop and
maintain a product that is perceived as different enough from the competitor's products
to warrant the asking price.
Effective implementation of a differentiation strategy requires an analytical study of
customer needs and preferences in order to offer a unique product. This usually helps
business organizations to achieve customer loyalty, which can also serve as an entry
barrier for new firms. Several studies have shown that a differentiation strategy is more
likely to generate higher profits than a cost-leadership strategy, because differentiation
creates stronger entry barriers. However, a cost-leadership strategy is more likely to
generate increases in market share.
A differentiation-focus strategy is the marketing of a differentiated product to a narrow
market, often involving a unique product and a unique market. This strategy is viable for
a company that can convince consumers that its narrow focus allows it to provide better
goods and services than its competitors.
None of these competitive strategies is guaranteed to achieve success, and some
companies that have successfully implemented one of Porter's generic strategies have
found that they could not sustain the strategy. Several risks associated with these
strategies are based on evolved market conditions (buyer perceptions, competitors,
etc).
Recent researchers argue that both cost-leadership and differentiation strategies can be
simultaneously achieved. The principal condition for this situation is superior quality,
which may lead to increased customer commitment on the one hand, and minimized
quality costs (through learning effects, economies of scale, etc.) on the other.

PORTER'S FIVE-FORCES MODEL

Before a company enters a market or market segment, the competitive nature of the
market or segment is evaluated. Porter suggests that five forces collectively determine
the intensity of competition in an industry: threat of potential entrants, threat of potential
substitutes, bargaining power of suppliers, bargaining power of buyers, and rivalry of
existing firms in the industry. By using the model shown in Figure 5, a firm can identify
the existence and importance of the five competitive forces, as well as the effect of each
force on the firm's success.

Figure 5 
Five Forces Model

The threat of new entrants deals with the ease or difficulty with which new companies
can enter an industry. When a new company enters an industry, the competitive climate
changes; there is new capacity, more competition for market share, and the addition of
new resources. Entry barriers and exit barriers affect the entrance of new companies
into a marketplace. If entry barriers (capital requirements, economies of scale, product
differentiation, switching costs, access to distribution channels, cost of promotion and
advertising, etc.) are high, a company is less likely to enter a market. The same holds
true for exit barriers.
The threat of substitutes affects competition in an industry by placing an artificial ceiling
on the prices companies within an industry can charge. A substitute product is one that
can satisfy consumer needs also targeted by another product; for
example, lemonade can be substituted for a soft drink. Generally, competitive pressures
arising from substitute products increase as the relative price of substitute products
declines and as consumer's switching costs decrease.
The bargaining power of buyers is affected by the concentration and number of
consumers, the differentiation of products, the potential switching costs, and the
potential of buyers to integrate backwards. If buyers have strong bargaining power in
the exchange relationship, competition can be affected in several ways. Powerful
buyers can bargain for lower prices, better product distribution, higher-quality products,
as well as other factors that can create greater competition among companies.
Similarly, the bargaining power of suppliers affects the intensity of competition in an
industry, especially when there is a large number of suppliers, limited substitute raw
materials, or increased switching costs. The bargaining power of suppliers is important
to industry competition because suppliers can also affect the quality of exchange
relationships. Competition may become more intense as powerful suppliers raise prices,
reduce services, or reduce the quality of goods or services.
Competition is also affected by the rivalry among existing firms, which is usually
considered as the most powerful of the five competitive forces. In most industries,
business organizations are mutually dependent. A competitive move by one firm can be
expected to have a noticeable effect on its competitors, and thus, may cause retaliation
or counter-efforts (e.g. lowering prices, enhancing quality, adding features, providing
services, extending warranties, and increasing advertising).
The nature of competition is often affected by a variety of factors, such as the size and
number of competitors, demand changes for the industry's products, the specificity of
assets within the industry, the presence of strong exit barriers, and the variety of
competitors.
Recently, several researchers have proposed a sixth force that should be added to
Porter's list in order to include a variety of stakeholder groups from the task environment
that wield over industry activities. These groups include governments, local
communities, creditors, trade associations, special interest groups, and shareholders.
The implementation of strategic planning tools serves a variety of purposes in firms,
including the clear definition of an organization's purpose and mission, and the
establishment of a standard base from which progress can be measured and future
actions can be planned. Furthermore, the strategic planning tools should communicate
those goals and objectives to the organization's constituents. Thus, the worth of these
tools, as well as others, is often dependent on the objective insight of those who
participate in the planning process. It is also important for those individuals who will
implement the strategies to play a role in the strategic-planning process; this often
requires a team effort that should allow a variety of inputs and should result in a better
overall understanding of the company's current and future industry position.
SEE ALSO: Generic Competitive Strategies ; Porter's 5-Forces Model ; Strategic
Planning Failure ; Strategy Formulation ; Strategy Implementation ; Strategy in the
Global Environment ; Strategy Levels ; SWOT Analysis
Donna T. Mayo
Revised by Evangelos Grigoroudis and
Constantin Zopoundis

FURTHER READING:
Costin, Harry. Readings in Strategy and Strategic Planning. Fort Worth, TX: The Dryden
Press, 1998.
David, R. Fred. Strategic Management: Concepts and Cases. Upper Saddle River, NJ:
Prentice Hall, 2003.
Houlden, Brian. Understanding Company Strategy: An Introduction to Analysis and
Implementation. Cambridge, MA: Blackwell Publishers, Inc., 1996.
Hunger, J. David, and Thomas L. Wheelen. Essentials of Strategic
Management. Reading, MA: Addison Wesley, 1997.
Porter, Michael E. Competitive Strategy. New York, NY: The Free Press, 1980.
——. Competitive Strategy of Nations. New York, NY: The Free Press, 1990.
Stahl, J. Michael, and David W. Grigsby. Strategic Management for Decision
Making. Massachusetts: PWS-KENT Publishing, 1992.
Wheelen, L. Thomas, and David J. Hunger. Strategic Management and Business
Policy: Entering 21st Century Global Society. Reading, MA: Addison Wesley, 1998.

Read more: http://www.referenceforbusiness.com/management/Sc-Str/Strategic-
Planning-Tools.html#ixzz4ywN1yYX3

Ingenious Enterprise
Organizations with explicit strategies for problem solving secure a
competitive advantage that can be maintained long term.
Business, at its heart, is about solving problems.

Problem solving is performed both explicitly by analysts and computers and implicitly by the
organization as a whole. And the design of an organization—its structure, processes,
communication policies, incentives, training, and talent management—shapes the way it
approaches and solves problems.

Many companies, however, lack explicit strategies for problem solving. And with the rapid
growth of data volume, interconnectedness, and speed of change, such strategies will give
companies the stable footing they’ll need to stay in the game—and win.
Share

How to Become an Ingenious Enterprise

Ingenious enterprises will gain an increasingly powerful competitive advantage over their
competitors as complexity in the business landscape continues to rise. Managers who want
their company to join the ranks of these organizations should do the following:

IDENTIFY YOUR PROBLEMS

Focus on high-value problems with fast-rising complexity. Do not oversimplify problems but
take a broad view—beyond industry—and identify the problems’ underlying structure.

BENCHMARK YOUR ALGORITHMS

Gauge where your company stands when compared with its key competitors according to
cost, speed, and accuracy of problem solving. Find out how companies in other industries
have solved problems similar to yours.

DEVELOP A REPERTOIRE
Create a toolbox of techniques for problem solving. Embrace both explicit algorithms and
implicit organizational techniques. Develop a framework that specifies when each technique
should be used and deploy it in the organization.

MAKE PROBLEM SOLVING A KEY CAPABILITY

 Reengineer your systems to reward creativity in problem framing and solving. Make
problem solving a key criterion in talent management.

EVALUATE AND EXPERIMENT

Measure the results of your problem solving on an ongoing basis. Try out new methods,
uses of data, and framing techniques. Vary the composition and structure of problem-
solving teams and external partners.

Business Thinking
JANUARY 01, 1977by Bruce Henderson
CATEGORIES: STRATEGY
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IN THIS ARTICLE
 Don't go to the library and read all the books before you know what it is you want to learn. 
 In business, you should define your problem and hypothesize a solution intuitively before wasting time on data
collection and analysis. 
 Only then should you redefine the problem more rigorously and reanalyze it in depth. 

Business thinking starts with an intuitive choice of assumptions. Its progress as analysis is intertwined with intuition.

The final choice is always intuitive. If that were not true, all problems of almost any kind would be solved by

mathematicians with nonquantitative data.

The final choice in all business decision is, of course, intuitive. It must be. Otherwise it is not a decision, just a

conclusion, a printout.

The tradeoff of subjective nonquantifiable values is by definition a subjective and intuitive choice. Intuition can be

awesome in its value at times. It is known as good judgment in everyday affairs. Intuition is in fact the subconscious

integration of all the experiences, conditioning and knowledge of a lifetime, including the emotional and cultural

biases of that lifetime.

But intuition alone is never enough. Alone it can be disastrously wrong. Analysis too can be disastrously wrong.

Analysis depends upon keeping the required data to manageable proportions. It also means keeping the

nonquantifiable data to a minimum. Thus analysis by its very nature requires initial oversimplification and intuitive

choice of starting assumptions with exclusion of certain data. All of these choices are intuitive. A mistake in any one

can be fatal to the analysis.

Any complex problem has a near infinite combination of facts and relationships. Business in particular is affected by

everything, including the past, the nonlogical and the unknowable. This complexity is compounded by multiple

objectives to serve multiple constituencies, many of whose objectives must be traded off. Problem solving with such

complexity requires an orderly, systematic approach in order to even hope to optimize the final decision.

When the results of analysis and intuition coincide, there is little gained except confidence. When the analysis

reaches conclusions that are counterintuitive, then more rigorous analysis and reexamination of underlying

assumptions are always called for. The expansion of the frame of reference and the increased rigor of analysis may

be fruitful.
 But in nearly all problem solving there is a universe of alternative choices, most of which must be discarded without

more than cursory attention. To do otherwise is to incur costs beyond the value of any solution and defer decision to

beyond the time horizon. A frame of reference is needed to screen the intuitive selection of assumptions, relevance of

data, methodology and implicit value judgments. That frame of reference is the concept.

Conceptual thinking is the skeleton or the framework on which all the other choices are sorted out. A concept is by its

nature an oversimplification. Yet its fundamental relationships are so powerful and important that they will tend to

override all except the most extreme exceptions. Such exceptions are usually obvious in their importance. A concept

defines a system of interactions in terms of the relative values that produce stable equilibrium of the system.

Consequently, a concept defines the initial assumptions, the data required and the relationships between the data

inputs. In this way it permits analysis of the consequences of change in input data.

Concepts are simple in statement but complex in practice. Outputs are almost always part of the input by means of

feedback. The feedback itself is consequently a subsystem interconnected with other subsystems.

Theoretically, such conceptual business systems can be solved by a series of simultaneous equations. In practice,

computer simulation is the only practical way to deal with the characteristic multiple inputs, feedback loops and higher

order effects in a reasonable time at reasonable cost with all the underlying assumptions made explicit. Pure

mathematics becomes far too ponderous.

Concepts are developed in hard science and business alike from an approximation of the scientific method. They

start with a generalization of an observed pattern of experience. They are stated first as a hypothesis, then postulated

as a theory, then defined as a decision rule. They are validated by their ability to predict. Such decision rules are

often crystallized as policies. Rarely does a business concept permit definitive proof enough to be called a “law”

except facetiously.

Intuition disguised as status, seniority and rank is the underlying normative mode of all business decisions. It could

not be otherwise. Too many choices must be made too often. Data is expensive to collect, often of uncertain quality

or relevance. Analysis is laborious and often far too expensive even though imprecise or superficial.

Yet two kinds of decisions justify rigorous and painstaking analysis guided by intuition derived from accumulated

experience. The irrevocable commitment of major reserves of resources deserves such treatment. So do the major

policies which guide and control the implementation of such commitments.

All rigorous analysis is inherently an iterative process. It starts with an intuitive choice and ends with an intuitive

decision. The first definition of a problem is inescapably intuitive. It must be in order to be recognized as a problem at

all. The final decision is intuitive. It must be or there is no choice and therefore no need for decision.

Between those two points of beginning and ending, the rigorous process must take place. The sequence is analysis,

problem redefinition, reanalysis and then even more rigorous problem redefinition, etc. until the law of diminishing

returns dictates a halt – intuitively.

The methodology and sequence of business thinking can be stated or at least approximated.
 State the problem as clearly and fully as possible. 

 Search for and identify the basic concepts that relate to the perceived critical elements. 
 Define the data inputs this conceptual reference will require. Check off and identify any major factors which are not

implicitly included in the conceptual base. 

 Redefine the problem and broaden the concept as necessary to include any such required inputs. 

 Gather the data and analyze the problem. 

 Find out to which data inputs the analysis is sensitive. Reexamine the range of options with respect to those factors

and the resulting range of outputs. 

 Based on the insights developed by the analysis, redefine the problem and repeat the process. 

 Reiterate until there is a consensus that the possible incremental improvement in insight is no longer worth the

incremental cost. That consensus will be intuitive. It must be. There is no way to know the value of the unknown.

It is a matter of observation that much of the value of a rigorous and objective examination of a problem will be found

in one of three areas:

 First, the previously accepted underlying assumptions may prove to be invalid, in fact, or inadequate as the problem

definition is changed. 

 Second, the interaction between component functions may have been neglected, resulting in suboptimization by

function. 

 Third, a previously unknown or unaccepted or misunderstood conceptual framework may be postulated which both

permits prediction of the consequence of change and partially explains these consequences.

It is also a matter of common observation that the wisest of intuitive judgments come after full exploration and

consensus on the nature of the problem by peers of near equal but diverse experience.

Finally, it is also a matter of general experience that implementation of the optimum decision will prove difficult if that

discussion and consensus have not been continued long enough to make the relationship between the overall

objective and the specific action seem clear to all who must interpret and implement the required policies. Otherwise,

the intuition of those who do the implementation will be used to redefine the policies which emerged from analysis.

This is one reason planned organization change is so difficult, and random drift is so common.

Here are some fundamental procedural suggestions. Define the problem and hypothesize the approach to a solution

intuitively before wasting time on data collection and analysis. Do the first analysis lightly. Then and only then

redefine the problem more rigorously and reanalyze in depth. (Don't go to the library and read all the books before

you know what you want to learn.) Use mixed project research teams composed of some people with finely honed

intuitions from experience and others with highly developed analytical skills and too little experience to know what

cannot be done. Perhaps in this way you can achieve the best of both analysis and intuition in combination and offset

the weaknesses of either.

Intuition and Structured Problem Solving
in Case Interviews
by Victor Cheng

Question:
I appreciate your response and just had a quick opinion question. I spoke to a friend of
mine, ex-Mckinsey consultant and interviewer.

He said, when I asked him about casework and interviews, that there is a key that many
people who employ solely the framework miss out on. It seems a bit different from some
of the advice given in your lectures and information.

He stated that when given a case to work, any kind of problem, the first thing you should
do is intuitively solve the problem as quickly and accurately as possible, not waiting until
the end of a case interview to describe a solution backed by data.

Then during the rest of the interview, utilize frameworks to check the completeness of
your solution and to give data-driven support to a conclusion.

What do you think about that? It suggests a different style of approach and ideas, and in
his mind is the difference between someone feeling around for the right answer, and
someone intelligent and reasonable enough to have the rightanswer. A.K.A the
difference between receiving an offer and almost receiving an offer.

My Reply:
At first glance it would seem your friend's perspective differs from the advice I've given
previously. But, it really is not very different at all -- though there is a terminology
difference.

When your friend says you should try to "intuitively solve the problem as quickly as
possible...", I would simply use the word "hypothesis," instead of that entire phrase.
So to rephrase using the terminology I've been using, your friend's advice is to not rely
only on a framework and produce a solution at the end, and is suggesting that you state
a hypothesis immediately or very early in the case.
This is very compatible with what I've said previously. There is some debate as to
whether you state a hypothesis immediately or early in the case.
Frankly, I personally do both, depending on the situation. If there is a little bit of data to
go on, I might set a hypothesis immediately. If not, I might wait 5 - 8 minutes to get
some data before setting a hypothesis.

Keep in mind it is always possible to set a hypothesis up front in a case. There's a very
high probability the hypothesis is wrong, but often that is not important, because you
quickly figure out why it is wrong if you test your hypothesis correctly.
And given how many candidates are overly framework-driven with no hypothesis, it is
probably a good idea to just start off with a hypothesis at the beginning of a case.
When I interviewed, there was very little case interview information publicly available,
and generally the people who knew frameworks also knew how to use a hypothesis.

And most people did not use frameworks at all. So when I interviewed, not using  an
explicit hypothesis up front was not a problem, but given how the competitive pool has
changed, it is a good idea to start with a hypothesis from the start of the case.

The part of your friend's comment that I totally agree with is it is a big mistake
to neverstate a hypothesis (or make an intuitive guess at the problem), and to only use
a framework.
In that scenario, you are not really problem solving. You are simply processing data.

Now there is also a wrong way to be intuitive that a lot of people use.
You can using intuition to create a hypothesis as to the a) problem, or you can create a
hypothesis as to b) the problem + the solution, or c) the solution.
I strongly recommend you re-read the last sentence three times. It is very important
to understand this point.
When people use intuition the wrong way, especially early in a case, they use option C
-- creating a hypothesis around the correct solution.
For example: A company is losing money. How should they turn it around?

So a solution-only hypothesis which I will argue is incorrect would be: "The client should
cut their fixed costs to fix their profitability problem."

It is wrong because it doesn't actually explicitly state the problem... and sort of leaps

ahead to a solution to a problem that might not even exist.
The other problem is it's a little more confusing to test this hypothesis.

The "right" way to state a similar hypothesis using option B above is, "The company's
fixed cost structure has increased by the exact same amount as the drop in profits, and
therefore, overhead should be cut."

Notice in the "right" way, the same solution is presented but the underlying problem is
stated explicitly.
Also notice how much easier it is to test a hypothesis that includes a "problem
definition," not just a "solution definition."
So compare the two hypotheses and ask yourself what data you would need to
prove each hypothesis:
Hypothesis 1: The company should cut overhead costs to improve profitability.

Hypothesis 2: The company's fixed cost structure has increased by the exact same
amount as the drop in profits, and therefore overhead should be cut.

For me, it is a little less obvious to figure out what data you need to test Hypothesis 1.
In comparison, it is very easy to figure out how to test Hypothesis 2.

All you need to know to start is:  Have fixed costs gone up? By how much? And is this
increase equal to the recent drop in profits?  (Of course, you'd want to set it up as
an issue tree, using the profitability framework as a template.)
If fixed costs actually decreased, we know the hypothesis is wrong.
So early in a case, the right way to use intuition is to state a hypothesis that includes
both an explicit reference to the problem, and a solution.... or just state a hypothesis
indicating what you intuitively feel is the problem.
The only time to use a solution-only hypothesis is late in a case, when through your
analysis, issue trees, and process of elimination, you've clearly isolated the problem...
and through synthesis you have conveyed that this is the core problem, then refining a
hypothesis to focus on a solution (without any reference to the problem) is perfectly
acceptable because the problem has already been explicitly defined, proven with data,
and mutually agreed upon.
When you use intuition early in a case where the problem has not yet been fully isolated
and defined, and your hypothesis statement does not explicitly reference the problem
(only a solution), which I will argue is a bad habit, most people will form their issue tree
to prove/disprove their explicit solution... when instead, they should have created an
issue tree to prove/disprove the problem implied by their statement first. (And most in
practice candidates never do this... which is why this is a bad habit.)
If this sounds a little convoluted and confusing, that's because it is!

So long story short, always make sure your hypothesis includes an explicit definition of
the problem and you will be fine.
So let me be clear, using a hypothesis that is only solution-oriented is not wrong in the
absolute sense. To be more precise, it is a bad habit because it dramatically increases
the odds you will set up your problem-solving structureincorrectly... because most
people will not notice the problem implied by their solution-only hypothesis, and will
therefore not gather data to test their implied hypothesis as to what the problem is... and
ultimately "get stuck."
You only get stuck when you skip steps!  If you never skip steps, you never get stuck!

So in your hypothesis statements, define the problem explicitly... don't skip this step!
I have never been stuck in a case -- ever.  That's because I never skip steps. Now, I do
occasionally miss certain insights on the first attempt, and perhaps have to find them on
a second attempt... but I never get "stuck".
If you are getting stuck in your practice cases, it is because you skipped a step --
usually without realizing it.
By the way, you will see many, many examples of every kind of hypothesis I referenced
above in Look Over My Shoulder®.
Many of the people who did poorly used a, "I think the right solution is Y" type of
hypothesis, and then would transition to, "The data I need to test whether Y is right or
not is ABC data."

Whereas those who did well had a, "I think the problem is X, and therefore the right
solution is Y... so the data I need to prove X (the problem), is Z data... and if X is indeed
the problem, then Y is the right solution, so let me focus on proving X is true."
This is structured problem solving (using a creative and intuitively determined
hypothesis as a starting point)... notice how it is both creative and analytical/structured
at the same time.
As people who have Look Over My Shoulder® intuitively figured out by listening to it
several times over and over again, when a candidate uses the bad habit approach, and
the hypothesis is wrong... the candidate has no idea why it is wrong... and ends up
spinning their wheels and gets stuck.
By using the good habit approach (of which the hypothesis is just one of many, many
good habits demonstrated in Look Over My Shoulder ®), if your hypothesis is wrong, it is
usually very obvious why the hypothesis was wrong.
Additionally, it is usually obvious what a better or refined hypothesis should be.

If you have additional interest in this topic, I'd refer you to the Look Over My
Shoulder®Program which has many examples and demonstrations of everything I talked
about above.
Additional Resources
If you found this post useful, I suggest becoming a registered member (it's free) to get
access to the materials I used to pass 60 out of 61 case interviews, land 7 job offers,
and end up working at McKinsey.
Members get access to 6 hours of video tutorials on case interviews, the actual
frameworks I used to pass my interviews, and over 500 articles on case interviews.
To get access to these free resources, just fill out the form below:

Organization Design
Many leaders are rethinking the design of their organizations.
They recognize that organization design can be a powerful way
to boost performance and keep up with ever-changing markets.
Yet many reorganization efforts fail.
More than half of companies in fact rate their reorganization initiatives as
“mostly” or “very” unsuccessful. BCG has identified six key factors that
distinguished the successes from the failures. Companies that employed these
factors have a significantly higher chance of experiencing faster growth and higher
profits than their peers:

 Agile ways of working

 A value-adding corporate center
 Clearly delineated profit and loss (P&L) responsibilities
 A flat management structure with a strong frontline focus
 Effective use of shared services
 Strong support for people and collaboration

BCG incorporated these success factors into our award-winning approach to

organization design.

BCG’s Approach to Organization Design: Smart

Design for Performance
We focus on shaping employee behavior: the underlying driver of a
company’s performance. The Smart Design for Performance approach uses a
wide variety of organizational levers (see graphics below) in combination and
creates a conducive and engaging context for employees so that it is in their
own individual interests to adopt and develop the desired behaviors. The
context changes the way that people act, interact, and make decisions,
resulting in higher organizational performance.

Strong organization design relies on holistic design and alignment of four major
design elements to shape target behaviors.
Share

Implementing Organization Design

When it comes to reorganizing, companies have little room for error. The
following six factors are critical to flipping the odds of success in a
reorganization:
1. Synchronize design with strategy. Regardless of the precipitating
factor, the reorganization must align with the
organization’s strategy and business priorities in the simplest way
possible.
2. Clarify roles and responsibilities. Of all the organizational
capabilities most required for a successful reorganization, this set—
clarifying roles and responsibilities, assigning accountabilities, and
determining decision rights—is one of the most difficult to get right.
3. Deploy the right leaders and the right capabilities. In
reorganizations, a common pitfall is tailoring the redesign around the
individual capabilities of a few important executives. Another pitfall is
overlooking the capabilities required for the new design to succeed.
4. Design layer-by-layer, not just top-down. A cascading approach
to design puts companies in a better position for success. Address
the needs of each layer, according to consistent design principles,
rather than using a top down-only design approach.
5. Lower execution risk. Execution is by far the most important
capability for achieving a successful reorganization—applying a
step-by-step, disciplined approach to implementation is crucial to
avoid missteps.
6. Don’t wait for a crisis to reorganize. Reorganizations that take
place prior to a crisis have a much better chance of success. During
a crisis, the odds of a successful reorganization are only 50/50.
Organization Design for Today’s Needs

The Smart Design approach, paired with our robust set of tools and experts,
can help ensure success in reorganization efforts. Learn more about the
solution that synchronizes structure with strategy and optimizes the
organization for shaping target behaviors and boosting performance.

LEARN MORE ABOUT ORGANIZATION DESIGN

 Smart Design for Performance

 Boosting Performance Through Organization Design
 Technology-Enabled Reorganization: Unlocking the Full Potential of
Organizational Transformation
 Flipping the Odds for Successful Reorganization
 Designing the Corporate Center: How to Turn Strategy into Structure
 How Digital Can Turbocharge Shared Services
 Breaking Free of the Silo: Creating Lasting Competitive Advantage Through
Shared Services

Time, Talent, Energy: Overcome Organizational Drag and Unleash Your Team's
Productive Power

Michael C. Mankins    Eric Garton

Business leaders know that the key to competitive success is smart management of scarce resources. That's why
companies allocate their financial capital so carefully. But capital today is cheap and abundant, no longer a source of
advantage. The truly scarce resources now are the time, the talent, and the energy of the people in your organization
—resources that are too often squandered. There's plenty of advice about how to manage them, but most of it
focuses on individual actions. What's really needed are organizational solutions that can unleash a company's full
productive power and enable it to outpace competitors.

Building off of the popular Harvard Business Review article, "Your Scarcest Resource," Michael Mankins and Eric
Garton, Bain & Company experts in organizational design and effectiveness, present new research into how you can
liberate people's time, talent, and energy and unleash your organization's productive power. They identify the specific
causes of organizational drag—the collection of institutional factors that slow things down, decrease output, and drain
people's energy—and then offer a simple framework for how managers can overcome it. With practical advice for
using the framework and in-depth examples showing how the best companies manage their people's time, talent, and
energy with as much discipline as they do their financial capital, this book shows managers how to create a virtuous
circle of high performance.

Over Fifty Problem Solving Strategies

Explained
by John Malouff, Ph.D., J.D.
The comprehensive nature of the list of problem solving strategies allows individuals to use a checklist
approach to problem solving. It also could facilitate training others in problem solving. The classification of
the strategies into types may facilitate the development of new strategies that fit into a specific category.
The explanations and examples given could serve as a valuable supplement to other explanations and
examples available in books and on the web.

The strategies on this list are in themselves not original. The original aspects of this list are (a) putting all
these specific strategies together, (b) organizing them into the types described below, and (c) giving each
type of strategy a fresh explanation with new examples.  

Problem solving strategies explained, with examples

Strategies to help you understand the problem
Clarify the problem

Clarify the problem. It is easier to solve a specific problem than a vague one. So clarify the problem
before you start looking for a solution. If your problem is that your spouse tells you that you are not
supportive enough, find out what he or she means by supportive. If your problem is that your mother can't
get the new VCR to work, determine what doesn't happen that she wants to happen. If your problem is a
math homework question, read carefully the question (usually at the end):Is the answer supposed to be in
metres or centimetres, rounded or not, square or not, etc.
Identify key elements of the problem

Identify key elements of the problem. Problems come to us with varying amounts of important and
useless information. Focusing on useless information distracts us and wastes time. So identify the key
elements of the problem before you start looking for a solution. If the problem is that of a couple who
come to you for counselling because they argue continually, ask them what they argue about, when, and
where. If the problem is that your bike squeaks when you ride it, determine what part squeaks.
Visualize the problem or a relevant process or situation

Visualize the problem or relevant process or situation. Sometimes we can see the problem and all its
important details right in front of us. This helps us understand the problem. Other times we can't see
important elements because they have already occurred or are not visible. In these cases, it is valuable to
visualize important elements of the problem. So, if you want to predict the future of the universe, visualize
the big bang and the ensuing events. If you want to open a lock without a key, visualize the lock
mechanism. If you want to determine how a murder was committed, visualize events that would explain
the physical evidence.
Draw a picture or diagram of the problem or a relevant process or situation

Draw a picture or diagram of the problem or a relevant process or situation.  Visualizing a problem can aid
understanding. However, we can keep only some much visual information in our minds at once. Hence, it
is often useful to draw a picture or diagram. So, if you want to calculate when two airplanes will collide,
draw their paths and speeds. If you plan to assault a house where a terrorist holds hostages, draw a
picture of the room, doors, windows, hostages, etc. If you want to speed up delivery of goods to retailers,
draw a diagram showing the steps in the process.
Create a model of the problem or a relevant process

Create a model of the problem or a relevant process. Creating a model of a problem or relevant process
helps us focus on essential elements and gives us the potential to alter the model and see what happens.
For instance, if you want to minimize harm to individuals in auto accidents, create a computer model of
the structures and forces involved. If you want to build a Mars rover, build a model. If you want to reduce
international strife, create a model of causes.
Imagine being the problem, a key process, or the solution

Imagine being the problem, a key process, or the solution. Imagination can help us understand a problem
by visualizing it. More understanding can occur in some cases if we go farther and imagine being the
problem, a key process, or the solution. So, if you want to understand space and time, you can imagine,
as Einstein did, riding a light beam. If you want to help a person who is very paranoid, you can imagine
being that person and seeing the world as he does. If you want to get a hit in a big baseball game, you
can imagine going up to bat, seeing the ball clearly, and swinging crisply while you step into the pitch, etc.
Simulate or act out a key element of the problem

Simulate or act out a key element of the problem. Understanding complex or vague problems can be
difficult. Simulating or acting out some key element of the problem can be productive. For instance, if you
are calculating probabilities of some event happening, you can simulate the situation and observe
outcomes yourself. If you want to help someone become more socially successful, you can act as that
person does and observe the consequences. If you want to determine why a spacecraft exploded,
simulate its flight, and try ways of recreating the explosion.
Consider a specific example

Consider a specific example. Problems often come to us in the abstract. Creating a concrete example
helps us explore the problem just as we might explore a specific example of dinosaur bones to
understand dinosaurs. So, if you want to determine what makes a person psychotic, consider real people
who have become psychotic. If you want to learn how to calculate the volume of a sphere, use a specific
radius, such as one metre, and apply the formula. If you want to determine why frogs are dying right and
left in your community, examine dead frogs.
Consider extreme cases

Consider extreme cases. Considering extreme cases is a type of considering a specific example. Here
the example is chosen to test the limits of a relevant parameter. Sometimes this gives insight into
important processes. So, if you want to determine whether level of intelligence affects retention on a
police force, consider officers with the highest and lowest intelligence on the force. If you want to
determine what happens to black holes in the long run, consider black holes that continue for infinitely
long or black holes that suck up everything in the universe. If you want to determine how temperature
affects the flow of electricity, consider a temperature of absolute 0.
Acquire knowledge of relevant domains

Acquire knowledge about relevant domains. If you want to understand and solve an electrical problem, it
may be necessary to learn about electrical systems. If you want to solve the problem of how to keep
humans free from solar-wind harm on the way to and from Mars, you may need knowledge of various
domains of science, engineering, and medicine. Great knowledge of relevant domains sometimes helps
experts solve problems that others cannot.
Change perspective

Change perspective. If you want to reduce crime in a community, look at crime from the perspective of
criminals and victims. If you want to convince a hostage taker to surrender, take that person's
perspective. If you want to avoid being bitten by a vicious dog, take the dog's perspective.
Consider levels and systems

Consider levels and systems. If you want to prevent skin cancer, consider events that trigger the cancer
at the level of the external environment, the intercellular level, and the intracellular level. If you want to
reduce school violence, consider systems such as communities, families, and individuals. If you want to
predict the weather, consider local conditions and approaching fronts.
Strategies to help you simplify the task
Solve one part at a time

Solve one part at a time. It is sometimes possible to make a problem easier to solve by attacking one part
at a time. For instance, if you want to reduce international conflict in the Middle East, choose two
countries with continuing conflict and focus on those. If you want to send a human to Mars, send and
retrieve information-gathering robots first. If you want to improve your personality, choose one
characteristic to improve at a time, starting, for instance, with your outgoingness.
Redefine the problem

Redefine the problem. If a problem seems presently unsolvable, consider what value underlies the desire
to solve that problem, and redefine the problem into something solvable. For example, if a farmer cannot
solve the problem of how to grow a specific crop on his land, he might analyse why he finds growing this
crop is desirable. If he decides that the reason is that the crop generally has a high profit margin, he might
review what other crops have a high profit margin or even consider profitable uses of his land that do not
involve farming. He thereby has redefined the problem from raising a certain crop on his land to making a
high profit with his land.
Strategies to help you determine the cause of the problem
Collect information about what happens before, during, and after the problem

Collect information about what happens before, during, and after the problem. Problems are often
triggered by something observable and reinforced by something that happens afterward. So if Carrie often
has temper tantrums, observe her and the situation carefully to collect information about what happens
before, during, and after the tantrum. You may find that pressing her to do difficult schoolwork usually
happens before and allowing her to avoid the schoolwork happens after. If Jake often has digestive
problems, you might find that nothing special happens before, during, or after. No specific foods seem to
trigger the problem, so diet restriction is unlikely to help. If you want to help heart surgery patients avoid
depression after their surgery, observe them before, during, and after surgery.
Organise information into a table, chart, or list and look for a pattern

Organize information into a table, chart, or list and look for patterns. Information collected about a
problem often becomes easier to search for patterns when put into a table, chart, or list. The patterns may
reveal causes of the problem. So, if you want to predict the next time a man will beat his wife, organize
information about his prior instances of wife beating and look for a pattern, such as beating being
delivered after he suffered an affront and drank heavily. If you want to determine how to prevent auto
accidents, put information about causes of past accidents into a table and look for patterns in the
aggregated data, such as a high proportion of the accidents being caused by young males who have
been drinking and were driving faster than the speed limit. If you want to predict when a stock will rise,
chart its price fluctuations over time and events in the past.
Try to make the problem worse

Try to make the problem worse. One way to determine whether you know what causes a problem is to try
to make the problem worse. This may be worth doing when the supposed solution is so difficult,
inconvenient, expensive, or dangerous as to justify caution in trying it. So, if you suspect that eating
strawberries is causing your nose to turn red, wait until your nose is its usual colour and eat a few
strawberries. If you think that a mentally retarded child has tantrums because of changes in his routine,
change the routine substantially on a few occasions and observe his behaviour.
Compare situations with and without the problem

Compare situations with and without the problem. Comparing situations with and without the problem can
sometimes shine light on a difference that causes the problem. So, if you want to eliminate bacterial
infections that kill women giving birth, compare the care given women who become infected with those
don't. You might see, as a 19th Century researcher did, that the women who are "helped" by physicians
who don't wash their hands between patients women become ill and the women who are helped by
midwives who do wash their hands do not become ill. If you want to know what causes AIDS, compare
people who do and don't have HIV and observe the people for several years. If you want to know what
causes violent crime, compare the intelligence of individuals who have and have not been convicted of
violent crimes.
Consider multiple causes and interactions

Consider multiple causes and interactions. Sometimes two or more variables or influences cause a
problem to occur. For instance, level of drunkenness depends on many factors, including the amount of
alcohol consumed and the body weight of the person. A harmful level of carbon monoxide gas may flow
into a house only if the wind is blowing hard in a certain direction, the heat exhaust pipe is less than a
metre above the roof, and the heat is on high. If we do not look for all the causes of a problem, we may
never find them. So if you want to determine what causes autism, wood rot in a house, or the cause of
someone's death, consider multiple causes and interactions.
Consider non-linear effects

Consider non-linear effects. Variables sometimes cause problems in a linear way, e.g., the more lead a
child eats, the greater the harm. However, some variables have curvilinear effects. For instance, some
arousal aids human performance, while a great deal of arousal impairs performance. So, if you want to
determine what causes a problem, consider non-linear effects.
Strategies involving the use of external aids to help you
identify possible solutions
Ask someone, especially an expert

Ask someone, especially an expert. If we look hard enough we can usually find someone who knows
more about how to solve a particular problem than we do. The fastest way to solve the problem may be to
ask that person. So if you don't know how to fix a leaking faucet, or help your child act more outgoing, or
improve your job interviewing success, ask an expert.
Seek the answer in written material

Seek the answer in written material. Written materials exist that show how to solve many problems. New
devices often come with instruction manuals. Libraries and bookstores are loaded with "How To" books.
The Internet offers answers to many problems – if we ask the right question and use judgment about
which web sites are credible. So if you want to learn how to improve the appearance of your nose, you
could look up "cosmetic" or "nose" surgery in an Internet search engine and in a medical encyclopaedia in
the library.
Use a tool or technology

Use a tool or technology. Some problems require the right tool, which could be a hammer, a computer, or
a metal detector. So whenever you have a problem to solve, consider whether some type of technology
might help you.
Apply a theory

Apply a theory. Good theories can point us in the right direction to find a solution to a problem. For
instance, Albert Bandura's social learning theory suggests that if we want to teach a child to act
altruistically, we would set an altruistic model in our behaviour, talk about our altruistic goals, and reward
the child (perhaps with praise) when she acts altruistically. Other theories in fields as different as
economics and physics provide possible solutions to various types of problems.
Apply the scientific method

Apply the scientific method. The scientific method has helped to produce many of the great
accomplishments of recent human history, such as doubling the average human lifespan, putting a
human on the moon, and discovering planets orbiting other stars. The method involves systematically
collecting data to test a hypothesis, applying certain types of research design and analysis methods to the
data, and being sceptical about the results. For more information, see:
http://teacher.nsrl.rochester.edu/phy_labs/AppendixE/AppendixE.html
Use mathematics

Use mathematics. Mathematics is essential to solving some problems, such as how to put an exploring
robot on Mars, how to determine whether one treatment is generally more effective than another for
pancreatic cancer, and how to defend an area from enemy missiles. There are many types of
mathematics, but even the simplest can be helpful in problem solving. For example, if you want to make
yourself happier, you might start by counting the number of days in the next 14 that you feel happy. Then
you have a baseline to use as a comparison after you make some behavioural or situational changes in
pursuit of more happiness. If you wanted to determine whether a new treatment for diabetes is better than
the usual treatment, you might use a t test to compare the blood sugar levels are of the group of people
using the new treatment with a group of people using the usual treatment.
Use a formula

Use a formula. Sometimes, a formula can help solve a problem. The formula could be a recipe, a set of
chemicals, pressures, and heat levels, or an established method of doing something else. So, if you want
to develop a permanent way of marking the right lens for contact lens wearers, start with the formulas for
permanent pens and markers. If you want to create a better toothpaste, start with a typical formula and try
altering its components.
Strategies involving the use of logic to help you identify
possible solutions
Reason by analogy in using what you have learned about similar problems

Reason by analogy, using what you have learned about similar problems. Going through life we solve
many problems. Often the problem solving methods we used and the actual solutions we found effective
in the past can work to solve a current problem. So, if you have solved before a problem with a
neighbour's dog barking all night, the same solution may work with another neighbour who plays loud
music all night. In fact, the same solution might be something to try with anyone who is chronically
annoying.
Use deductive reasoning

Use deductive reasoning. Deductive reasoning involves going from a general rule to an application in a
specific instance. So, if we assume that people commit murder only if they have a motive, then we look
for murder suspects among people who had a motive. If we start with a premise that people do what they
think is in their best interest, we try to provide employees incentives to work productively. If we believe
causes must occur prior to effects, we can conclude that a huge grass fire did not cause the high level of
asthma attacks that started two days before the fire.
Use inductive reasoning

Use inductive reasoning.  Inductive reasoning involves drawing on specific instances to form a general
rule. So, if you want to know whether your child will leave your yard if left outside alone, one thing you
could do would be to set up that situation and covertly observe the child on several occasions. If you want
to find out whether eating chocolate causes you acne, eat chocolate every day for two weeks, then not at
all for two weeks, then every day again for two weeks, then not at all for two week, and record the state of
your skin every day. If you want to know whether a genetically altered microbe will reproduce in field
settings, put a specific number of the microbes in field settings and later count the number.
Question assumptions

Question assumptions.  Our thinking contains many assumptions or beliefs that have never been well
tested, such as that our religion or ethnic group is the best one. If you want to reduce inter-group conflict,
questioning these assumptions might help.   If you want to stop children from starting to use illegal drugs,
question the assumption that educating them about the effects of the drugs will discourage use.   If you
want to develop close relations with your supervisor, you may benefit from questioning your assumption
that all supervisors are power hungry and self-centred.
Strategies using a possible solution as a starting point to help
you solve a problem
Guess, check, and adjust

Guess, check, and adjust.  It may work to guess at a solution, especially if the range of possible solutions
is limited as in a multiple-choice test. You can check to see whether your guess is right, and then
eliminate the option if it is not.   As Sherlock Holmes said, once you have eliminated all the possibilities
except one, that one must be the solution.  Sometimes guessing can help us even when the range of
possible answers is unlimited.  For instance, in solving for x in x + y = 12 and 2x – y = 3, if there are no
answers from which to choose, and you don't know how to solve simultaneous equations, you can guess
at what x is, and if you miss, you can use how much you miss by to make a better second guess, and so
on, adjusting your guessing as you go. That, in essence, is how software for structural equation modelling
proceeds to a solution.
Work backward

Work backwards.  In solving a printed maze, looking at the goal area and working backward sometimes
offers the fastest solution. That may occur because the maze maker did not expect you to use this
strategy. Also, if you want to recreate the events involved in a crime, you could start with a possible
perpetrator and the available evidence, work backward in time, and see what makes sense.
Strategies to help you determine which possible solution is
best
Estimate the likely costs and benefits of possible solutions

Estimate the likely costs and benefits of possible solutions.  Use deductive and inductive reasoning and
the scientific method to estimate the costs and benefits of each possible solution. For instance, if you
have a wart on your hand, one option is to buy a commercial product that slowly disintegrates the wart.
The costs include the financial cost of buying the product, the time spent in applying it daily, the cost of
bandages to cover the area, the inconvenience of wearing bandages, the possible embarrassment of
being asked why your are wearing a bandage, and the possibility of a life-long scar. On the benefit side
the wart is very likely to be eliminated.
Choose one or more options to implement

Choose one or more options to implement.  Solving a problem usually involves doing something. So, use
deductive and inductive reasoning and the scientific method to choose one or more options to implement.
This usually involves weighing the costs and benefits of each option according to your values. For
instance, if you want to eliminate a wart, you might choose to do nothing and bet on the significant chance
the wart will go away on its own and leave no scar. You might choose this approach because you have
strong feelings against creating a life-long scar, such as those caused by more active approaches.
Implement the best solutions and collect information about the effects of it

Implement the best possible solution and collect information about the effects of it.  Use deductive and
inductive reasoning and the scientific method to determine the effects of the chosen option. So, if you
want to eliminate a wart, you might wait a year and see whether it goes away on its own. If it doesn't, you
could choose a more active option.
Strategies using geometry for problem solving
Do the opposite of what you have been doing

Do the opposite of what you have been doing.  This 180 degree shift in approach is often essential for
helping individuals reduce anxiety about specific situations, such as public speaking or seeing someone
bleeding. Phobics tend to avoid the situation, thereby making their anxiety increase. The best way to
reduce anxiety is to expose oneself, gradually or not, to the feared situation. This principle also comes
into play when a physician notices a patient is getting worse and worse. That may be the time to decrease
the medication rather than increase them -- if the medications are causing the worsening.
Try a totally different approach

Try a totally different approach. If many individuals have tried to solve a certain problem and failed, it
might be helpful to try an approach that is not just somewhat different but very different. One might
describe this method geometrically as moving the attack to a different plane. Einstein did that with his
theory of general relativity. Most such efforts will eventually be considered crackpot; some will be called a
work of genius.
Strategies to help you function optimally while problem solving
Think of options without immediately evaluating them

Record and fully consider options.  It is often wise to consider a range of solution options when engaged
in problem solving. Several options may solve a problem, but one may solve the problem more
completely or cheaply. Individuals may squelch their own good ideas or the good ideas of others by
immediately rejecting ideas. Hence, it may help to record possible solutions and consider them fully. Even
a very bad idea might point in a useful direction if it is not pushed aside too quickly.
Set a goal with a purpose you value

Set a goal with a purpose you value.  Setting a goal with an outcome we value tends to help us achieve
more. So, if you have an assignment of math problems to complete, you might set a personal goal of
completing all of them correctly for the purpose of earning an "A" on the assignment and in the course so
that you can improve your chances of gaining admission to medical school, so you can spend your life
helping ill children. If you have a problem of getting your research approved by an ethics board, set a goal
of gaining approval so that you can do the research and help others with your findings.
Avoid distraction

Avoid distraction.  Distractions slow the problem solving process. Distractions can include environmental
events such as phone calls and machinery noise. Distractions can also include repeated intrusive
thoughts ("This is a terrible situation!"). One way to avoid external distractions is to go somewhere
peaceful where no one can find you. Another way is to disconnect the phone and put up a "Do not disturb,
please" sign. One way to reduce intrusive thoughts is to tell yourself that you will think about these
emotion-laden matters at a specific later time, but for now you are going to yell "STOP!" every time the
thought intrudes. Another way to reducing intrusive thoughts is to write them down or to tell someone
close to you about them.
Work in a new setting

Work in a new setting.  New settings sometimes prompt new types of thinking that can be useful in
solving hard problems. For instance, go sit and think in the quiet park across from your headquarters, in a
forest cabin, or in a different library.
Adjust time limit to optimum

Adjust time limit to optimum.  Some problems are easy to solve but tedious.  It may facilitate efficiency to
set an artificially brief time frame for completion, e.g., "I'm going to finish these math problems in 30
minutes. "For difficult problems, increasing the time frame for solution may help by reducing distraction-
provoking anxiety. So if you are asked to solve a difficult problem, ask for an amount of time that will be
sufficient to eliminate time pressure but still not so long as to induce inefficiency.
Work with someone

Work with someone.  All else being equal, several people working on a difficult problem tend to produce a
better solution than one person. Some efficiency may be lost, so working with someone may best be
reserved for very difficult problems. So, if you want to clone a bonobo, work with someone.  If you want to
end your dependency on tobacco, work with someone.
Create a positive mood with an optimum arousal level

Create a positive mood with an optimum arousal level.  People work better when they have a positive
mood and a moderate arousal level. To create a positive mood, you could engage in some activity you
greatly enjoy, such as listening to music or reading a book, or you could think back about huge triumphs
and outstanding moments in your life. To avoid excessive arousal, you could use a relaxation method
such as deep breathing, tensing and relaxing muscle groups, and telling yourself to stay calm.
Think of the problem as a challenge or opportunity

Think of the problem as a challenge or opportunity.  No one wants to have "problems." So we often think
of problem solving as an unfortunate, unpleasant task. Such a negative view of the problem solving may
impair our performance at the task. In order to keep a positive mood and keep working on a problem, it is
helpful to think of the problem as a challenge or opportunity. So, if the barking of your neighbour's dog is
driving you batty, look at the situation as an opportunity to practice your assertion skills. If your PC won't
come on, look at the situation as an opportunity to challenge yourself, as you might with an anagram. If
your investments go sour, think of the situation as a challenge: Do you still have what it takes to make
yourself rich through earnings or investment?
Think confidently

Think confidently.  Confidence helps us persist in problem solving, and confidence comes most powerfully
from problem solving success. So, think about past problem solving successes or solve another problem
to boost your confidence about solving a specific problem. Useful thoughts include "I have solved more
difficult (or similar) problems," "I know how to approach this problem," and "I can solve this problem if I try
hard enough."
Take a break

Take a break.  People can get fixed on a certain way of thinking about a problem or a specific class of
possible solutions. It sometimes helps to take a break and think about matters unrelated to the problem in
order to open the mind to new ideas. Some people benefit from sleeping on a problem.
Persist

Persist.  Persistence in problem solving often pays off. It took many years to build the Great Wall of
China. It may take you some time to solve a problem. Your odds of success often go to 0 when you give
up. With continued effort, you have a chance. So, whether you want to want to become a millionaire or
you want to eliminate the use of land mines, persist. If one possible solution fails, try another one or try
another problem solving strategy.  Note though that persistence can become maladaptive if the goal is
unrealistic.  In some cases, the best course is to accept a problem as presently unsolvable and focus
(with persistence) on other, solvable problems.
Strategies to help you solve multiple problems
Adopt a problem solving orientation

Adopt a problem solving orientation.  People who look for problems to solve have a decided advantage
over others. These individuals can often identify problems when the problems are small enough to be
easily solved and when enough time is available to allow the use of good problem solving strategies. For
instance, it is far easier to lose a few kilograms of weight than to lose 50 kilos. Individuals who wait for
problems to become unbearable or unavoidable before dealing with them may experience unnecessary
stress when circumstances force them to tackle a problem. Naturally, looking for problems to solve will
tend to lead to more problems solved. A math student who does all the problems in a textbook rather than
just the half assigned is an example of that principle. So is an executive who looks for problems that keep
her workers from being productive.
Apply triage

 Apply triage.  Often there are multiple problems a person could try to solve at any one time. Emergency
room physicians have developed the custom of triage, which is assessing the urgency of the health
problem of each of the current patients. In problem solving, it is wise to consider during triage which
problem has (1) the most important outcome, (2) the greatest chance for solution, and (3) the nearest
deadline. So, if you lose your 3-year-old child in an outdoor crowd and your 8-year-old child has a
headache, you focus on the lost child because the risk of harm is greater with that child. If you have two
problems to solve, and one, such as developing a method of time travel, seems currently unsolvable,
work on the other problem first. If you have two important problem-solving assignments, with one due
tomorrow and one due in a week, focus first on completing the one due tomorrow. Sometimes the
problem with the most important outcome is different from the problem with the best chance of solution or
the nearest deadline. Then you have to apply your own judgment in weighing the triage considerations.
Solve one problem at a time

Solve one problem at a time.  When faced with multiple problems, individuals may panic or lose hope and
then quit trying. When facing more than one problem, to the extent possible, focus on solving one at a
time. So if you are overweight and smoke, choose one of these problems to work on at a time. If you
dislike your job and your roommate, choose one to work on. If you want to improve your writing and
speaking skills, choose one with which to start.
Sources of the list
The strategies in this document come from a variety of sources, many of which have long since faded
from my memory. Some of the ideas were previously described in the following references, which provide
a wealth of examples:

D'Zurilla, T.J., & Goldfried, M.R. (1971). Problem solving and behaviour modification. Journal of Abnormal
Psychology, 78, 104-126.

Fabian, J. (1990). Creative thinking & problem solving. Chelsea, MI:Lewis.

More information about Problem Solving

Harris, R. (2002).   Problem solving techniques.
McNamara, C. (1999).  Basic guidelines to problem solving and decision making.
Wikipedia (2006).  Problem solving.
About the author
John Malouff, Ph.D., J.D., earned a law degree from the University of Colorado in 1979 and a Ph.D. in clinical
psychology from Arizona State University in 1984. He currently works as an associate professor of psychology at
the University of New England, in Armidale, Australia. He has co-authored five books and several dozen articles in
scientific journals. He writes a blog on Using Psychology in day-to-day life.

ntroduction to the Scientific Method

The scientific method is the process by which scientists, collectively and over time,
endeavor to construct an accurate (that is, reliable, consistent and non-arbitrary)
representation of the world.
Recognizing that personal and cultural beliefs influence both our perceptions and our
interpretations of natural phenomena, we aim through the use of standard
procedures and criteria to minimize those influences when developing a theory. As a
famous scientist once said, "Smart people (like smart lawyers) can come up with very
good explanations for mistaken points of view." In summary, the scientific method
attempts to minimize the influence of bias or prejudice in the experimenter when
testing an hypothesis or a theory.

I. The scientific method has four steps

1. Observation and description of a phenomenon or group of phenomena.

2. Formulation of an hypothesis to explain the phenomena. In physics, the
hypothesis often takes the form of a causal mechanism or a mathematical relation.

3. Use of the hypothesis to predict the existence of other phenomena, or to predict

quantitatively the results of new observations.

4. Performance of experimental tests of the predictions by several independent

experimenters and properly performed experiments.

If the experiments bear out the hypothesis it may come to be regarded as a theory or
law of nature (more on the concepts of hypothesis, model, theory and law below). If
the experiments do not bear out the hypothesis, it must be rejected or modified.
What is key in the description of the scientific method just given is the predictive
power (the ability to get more out of the theory than you put in; see Barrow, 1991)
of the hypothesis or theory, as tested by experiment. It is often said in science that
theories can never be proved, only disproved. There is always the possibility that a
new observation or a new experiment will conflict with a long-standing theory.

II. Testing hypotheses

As just stated, experimental tests may lead either to the confirmation of the
hypothesis, or to the ruling out of the hypothesis. The scientific method requires that
an hypothesis be ruled out or modified if its predictions are clearly and repeatedly
incompatible with experimental tests. Further, no matter how elegant a theory is, its
predictions must agree with experimental results if we are to believe that it is a valid
description of nature. In physics, as in every experimental science, "experiment is
supreme" and experimental verification of hypothetical predictions is absolutely
necessary. Experiments may test the theory directly (for example, the observation of
a new particle) or may test for consequences derived from the theory using
mathematics and logic (the rate of a radioactive decay process requiring the
existence of the new particle). Note that the necessity of experiment also implies
that a theory must be testable. Theories which cannot be tested, because, for
instance, they have no observable ramifications (such as, a particle whose
characteristics make it unobservable), do not qualify as scientific theories.

If the predictions of a long-standing theory are found to be in disagreement with

new experimental results, the theory may be discarded as a description of reality,
but it may continue to be applicable within a limited range of measurable
parameters. For example, the laws of classical mechanics (Newton's Laws) are valid
only when the velocities of interest are much smaller than the speed of light (that is,
in algebraic form, when v/c << 1). Since this is the domain of a large portion of
human experience, the laws of classical mechanics are widely, usefully and correctly
applied in a large range of technological and scientific problems. Yet in nature we
observe a domain in which v/c is not small. The motions of objects in this domain, as
well as motion in the "classical" domain, are accurately described through the
equations of Einstein's theory of relativity. We believe, due to experimental tests,
that relativistic theory provides a more general, and therefore more accurate,
description of the principles governing our universe, than the earlier "classical"
theory. Further, we find that the relativistic equations reduce to the classical
equations in the limit v/c << 1. Similarly, classical physics is valid only at distances
much larger than atomic scales (x >> 10-8 m). A description which is valid at all length
scales is given by the equations of quantum mechanics.

We are all familiar with theories which had to be discarded in the face of
experimental evidence. In the field of astronomy, the earth-centered description of
the planetary orbits was overthrown by the Copernican system, in which the sun was
placed at the center of a series of concentric, circular planetary orbits. Later, this
theory was modified, as measurements of the planets motions were found to be
compatible with elliptical, not circular, orbits, and still later planetary motion was
found to be derivable from Newton's laws.

Error in experiments have several sources. First, there is error intrinsic to

instruments of measurement. Because this type of error has equal probability of
producing a measurement higher or lower numerically than the "true" value, it is
called random error. Second, there is non-random or systematic error, due to factors
which bias the result in one direction. No measurement, and therefore no
experiment, can be perfectly precise. At the same time, in science we have standard
ways of estimating and in some cases reducing errors. Thus it is important to
determine the accuracy of a particular measurement and, when stating quantitative
results, to quote the measurement error. A measurement without a quoted error is
meaningless. The comparison between experiment and theory is made within the
context of experimental errors. Scientists ask, how many standard deviations are the
results from the theoretical prediction? Have all sources of systematic and random
errors been properly estimated? This is discussed in more detail in the appendix
on Error Analysisand in Statistics Lab 1.

III. Common Mistakes in Applying the Scientific Method

As stated earlier, the scientific method attempts to minimize the influence of the
scientist's bias on the outcome of an experiment. That is, when testing an hypothesis
or a theory, the scientist may have a preference for one outcome or another, and it
is important that this preference not bias the results or their interpretation. The
most fundamental error is to mistake the hypothesis for an explanation of a
phenomenon, without performing experimental tests. Sometimes "common sense"
and "logic" tempt us into believing that no test is needed. There are numerous
examples of this, dating from the Greek philosophers to the present day.
Another common mistake is to ignore or rule out data which do not support the
hypothesis. Ideally, the experimenter is open to the possibility that the hypothesis is
correct or incorrect. Sometimes, however, a scientist may have a strong belief that
the hypothesis is true (or false), or feels internal or external pressure to get a specific
result. In that case, there may be a psychological tendency to find "something
wrong", such as systematic effects, with data which do not support the scientist's
expectations, while data which do agree with those expectations may not be
checked as carefully. The lesson is that all data must be handled in the same way.

Another common mistake arises from the failure

to estimate quantitatively systematic errors (and all errors). There are many
examples of discoveries which were missed by experimenters whose data contained
a new phenomenon, but who explained it away as a systematic background.
Conversely, there are many examples of alleged "new discoveries" which later
proved to be due to systematic errors not accounted for by the "discoverers."

In a field where there is active experimentation and open communication among

members of the scientific community, the biases of individuals or groups may cancel
out, because experimental tests are repeated by different scientists who may have
different biases. In addition, different types of experimental setups have different
sources of systematic errors. Over a period spanning a variety of experimental tests
(usually at least several years), a consensus develops in the community as to which
experimental results have stood the test of time.

IV. Hypotheses, Models, Theories and Laws

In physics and other science disciplines, the words "hypothesis," "model," "theory"
and "law" have different connotations in relation to the stage of acceptance or
knowledge about a group of phenomena.

An hypothesis is a limited statement regarding cause and effect in specific situations;

it also refers to our state of knowledge before experimental work has been
performed and perhaps even before new phenomena have been predicted. To take
an example from daily life, suppose you discover that your car will not start. You may
say, "My car does not start because the battery is low." This is your first hypothesis.
You may then check whether the lights were left on, or if the engine makes a
particular sound when you turn the ignition key. You might actually check the voltage
across the terminals of the battery. If you discover that the battery is not low, you
might attempt another hypothesis ("The starter is broken"; "This is really not my
car.")

The word model is reserved for situations when it is known that the hypothesis has
at least limited validity. A often-cited example of this is the Bohr model of the atom,
in which, in an analogy to the solar system, the electrons are described has moving in
circular orbits around the nucleus. This is not an accurate depiction of what an atom
"looks like," but the model succeeds in mathematically representing the energies
(but not the correct angular momenta) of the quantum states of the electron in the
simplest case, the hydrogen atom. Another example is Hook's Law (which should be
called Hook's principle, or Hook's model), which states that the force exerted by a
mass attached to a spring is proportional to the amount the spring is stretched. We
know that this principle is only valid for small amounts of stretching. The "law" fails
when the spring is stretched beyond its elastic limit (it can break). This principle,
however, leads to the prediction of simple harmonic motion, and, as a model of the
behavior of a spring, has been versatile in an extremely broad range of applications.

A scientific theory or law represents an hypothesis, or a group of related hypotheses,

which has been confirmed through repeated experimental tests. Theories in physics
are often formulated in terms of a few concepts and equations, which are identified
with "laws of nature," suggesting their universal applicability. Accepted scientific
theories and laws become part of our understanding of the universe and the basis
for exploring less well-understood areas of knowledge. Theories are not easily
discarded; new discoveries are first assumed to fit into the existing theoretical
framework. It is only when, after repeated experimental tests, the new phenomenon
cannot be accommodated that scientists seriously question the theory and attempt
to modify it. The validity that we attach to scientific theories as representing realities
of the physical world is to be contrasted with the facile invalidation implied by the
expression, "It's only a theory." For example, it is unlikely that a person will step off a
tall building on the assumption that they will not fall, because "Gravity is only a
theory."

Changes in scientific thought and theories occur, of course, sometimes

revolutionizing our view of the world (Kuhn, 1962). Again, the key force for change is
the scientific method, and its emphasis on experiment.

V. Are there circumstances in which the Scientific Method is not applicable?

While the scientific method is necessary in developing scientific knowledge, it is also

useful in everyday problem-solving. What do you do when your telephone doesn't
work? Is the problem in the hand set, the cabling inside your house, the hookup
outside, or in the workings of the phone company? The process you might go
through to solve this problem could involve scientific thinking, and the results might
contradict your initial expectations.

Like any good scientist, you may question the range of situations (outside of science)
in which the scientific method may be applied. From what has been stated above, we
determine that the scientific method works best in situations where one can isolate
the phenomenon of interest, by eliminating or accounting for extraneous factors,
and where one can repeatedly test the system under study after making limited,
controlled changes in it.

There are, of course, circumstances when one cannot isolate the phenomena or
when one cannot repeat the measurement over and over again. In such cases the
results may depend in part on the history of a situation. This often occurs in social
interactions between people. For example, when a lawyer makes arguments in front
of a jury in court, she or he cannot try other approaches by repeating the trial over
and over again in front of the same jury. In a new trial, the jury composition will be
different. Even the same jury hearing a new set of arguments cannot be expected to
forget what they heard before.

VI. Conclusion

The scientific method is intricately associated with science, the process of human
inquiry that pervades the modern era on many levels. While the method appears
simple and logical in description, there is perhaps no more complex question than
that of knowing how we come to know things. In this introduction, we have
emphasized that the scientific method distinguishes science from other forms of
explanation because of its requirement of systematic experimentation. We have also
tried to point out some of the criteria and practices developed by scientists to reduce
the influence of individual or social bias on scientific findings. Further investigations
of the scientific method and other aspects of scientific practice may be found in the
references listed below.

VII. References

1. Wilson, E. Bright. An Introduction to Scientific Research (McGraw-Hill, 1952).

2. Kuhn, Thomas. The Structure of Scientific Revolutions (Univ. of Chicago Press,

1962).

3. Barrow, John. Theories of Everything (Oxford Univ. Press, 1991).

Send comments, questions and/or suggestions via email

to wolfs@nsrl.rochester.edu.
 How to Become a Consultant at
the Boston Consulting Group
By Sarah Grant | March 3, 2016

Cheat Sheet is a regular series in which the people hiring for some of the most desirable
jobs reveal how they pick among applicants. To join the global firm that Fortune 500
companies depend on to untangle strategy problems, you need to be sharp and lightning-
quick.
See all the cheat sheets here.

Interview Cheat Sheet #22

See more in the series
The Job

 The Boston Consulting Group

 Position:
 Consultant

 Hiring Manager
 Jennifer Comparoni
 North America Region Consulting Recruiting Director

 Salary:
 $98,000 - $164,000 (Glassdoor)

 Description:
 Work with a case team that includes all levels of consulting staff. Analyze projects and work directly with
clients to develop solutions.

 Qualifications:
 MBA or other advanced degree preferred; persuasive, creative problem-solving.

The Method
First Round:
Meet with two consultants, project leaders, or principals on staff at BCG for two 45-minute, on-campus recruiting
sessions. (Or meet elsewhere, if the candidate is out of school.) The interviewers ask candidates about their
backgrounds and requests they complete a real-life case study to demonstrate problem-solving skills and
creativity.
Second Round:
Interviews at a BCG office with partners or principals, wherein the candidate goes through a more rigorous case
interview than the first one. “We want to see how you adjust your thinking based on new information and insights
from data.”

The Score:
Interviewers discuss the candidate’s performance and decide on the right candidate over the course of a
conversation. Partners put the most weight on how innovative the candidate was during the case study, along with
how well they think on their feet.

How to Ace It
 Do lead with your impressive track record. “We tend to look beyond intellect for this role. Give us concrete
ways you’ve capitalized on opportunities and executed them.”

 Do look at all the angles of a case. “We’re impressed by someone who is creative and hypothesis-driven, not
necessarily the person who gets the right answer the fastest.”

 Do explain your academic background. “Not having an MBA won’t disqualify you. Our consultants hold an array
of diplomas, from PhD’s to M.D’s and JD’s.”

 Don’t over-prepare. “Planning everything you’re going to say and do in the case study portion of the interview
makes for a stale presentation and misses the mark. The point of the case is to see how you approach problems in
real time.”

 Don’t fumble your elevator pitch. “Know your personal stories inside and out, because you’ll only have time to
give the interviewer one or two anecdotes to take away from the interview.”

Demystifying Organization Design

 Understanding the Three Critical Elements
JUNE 15, 2010by Julie Kilmann, Michael Shanahan, Andrew Toma, and Kuba Zielinski
CATEGORIES: PEOPLE & ORGANIZATION
 PRINT
 PDF
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BROWSE THIS ARTICLE

Overview
Structure
Individual Capabilities
Roles and Collaboration
Authors & Acknowledgments

New strategies—or shifts in existing strategies—frequently require a change in organization design. Whether companies are

winning new customers, launching new products quickly, achieving radical cost reduction, expanding globally, or accomplishing

breakthrough innovations—organization design should be at the heart of their initiatives.

Frequently, however, organization design is an afterthought—or not thought of at all. Often, senior executives do not want to

change the design of their organizations. Perhaps past efforts did not deliver, did not address root causes, or were too abstract.

Maybe execution was messy. But it does not have to be that way.

Organization design can and should provide effective and practical resolution of many stubborn strategy and business-

execution issues. If a redesign is to work, however, executives need to recognize that all three elements of design—structure,

individual capabilities, and roles and collaboration—are essential in making a change. Indeed, there is a dynamic interplay

among them. (See the exhibit “The Elements of Design Must Link to Strategic and Business Imperatives.”)
 When structure, individual capabilities, and roles and collaboration are in alignment—and tightly linked with a company’s

strategy and sources of competitive advantage—an organization is geared for performance. 

Organizational Capabilities Matter

Organization of the Future: Designed to Win
JANUARY 31, 2012by Fabrice Roghé, Andrew Toma, Julie Kilmann, Ralf Dicke, and Rainer Strack
CATEGORIES: PEOPLE & ORGANIZATION, CHANGE MANAGEMENT
 PRINT
 PDF
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 PEOPLE & ORGANIZATIONNOVEMBER 2014
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 PEOPLE & ORGANIZATIONAPRIL 2002

RAVE (Real Asset Value Enhancer)

 PEOPLE & ORGANIZATIONDECEMBER 2011

 The Five Traits of Highly Adaptive Leadership Teams
 PEOPLE & ORGANIZATIONSEPTEMBER 2011
 High-Performance Organizations
 PEOPLE & ORGANIZATIONMAY 2016
 Good Vibrations: The CEO’s Practical Guide to Create and Amplify Energy

BROWSE THIS ARTICLE

Overview
A Matter of Importance: Organizational Attributes

A Comprehensive Framework of Capabilities

The Growing Importance of Behavioral Factors
The Gap Between Current Practice and Best Practice

The Way Forward: Capabilities to Build, Actions to Take

Bringing Behaviors to the Fore

Alighning and Improving People Practices
Ensuring That Structure Aligns with Business Strategy
Authors & Acknowledgments

On the surface, the world’s best organizations may look like many of their competitors: similar kinds of products, comparable

business strategies, and related operating models. But put them under the metaphorical microscope, and what you see are

distinct combinations of winning attributes.

BCG has recently developed and applied a powerful way to probe more deeply into the makeup of the most successful

organizations. The objective of this study was to pinpoint the capabilities that matter most for financial performance, to spot

the gaps between best-practice capabilities and those typical of organizations today, and to lay out priorities to help companies

close those gaps.

Our survey was comprehensive in scope and scale. We crafted a framework of 20 capabilities that define “organization” in very

clear ways, making it more relevant to the everyday experiences of senior managers. We wove the framework into a detailed

online questionnaire; our 12 partner organizations worldwide then sent the link to the online survey to many of their members

in more than 35 countries. We received a total of 1,600 responses, with input from every continent and from major economic

hubs such as China, the Indian subcontinent, Russia, and South America, as well as from Japan, North America, the United

Kingdom, Germany, and other countries in Western Europe.

The survey achieved broad sectoral coverage, too. It canvassed different industries, from consumer goods and health care to

financial services and energy, as well as different functions, from support functions such as HR and finance to business functions

like product development, manufacturing, and marketing. The respondents were mostly senior executives, including C-suite

officers, which underscores the relevance of the topic to corporate success.

The survey itself was not trivial: it required up to 30 minutes from the respondents. The questions covered both the pressing

challenges of today’s economy and the internal capabilities needed to secure an organization’s future success. The

questionnaire was designed to help us analyze the strengths and needs of respondents’ organizations and to make it simpler to

pinpoint the capability gaps in many different dimensions. To complement the results from our large-scale survey and gain

deeper insights into selected topics, we also conducted face-to-face interviews with more than 20 senior executives from

international corporations.

The study’s findings—laid out in this BCG Focus—yield some striking conclusions. They demonstrate clearly that organizational

capabilities drive corporate success. And they reveal that behavioral aspects, often seen as tangential, are vital differentiators—

but only when they accompany structural capabilities such as superior organization design and rigorous business processes and

controls. A follow-on report explores six factors that are critical to a successful reorganization.