-Housekeeping, X-Culture-

0 Some have not been assigned X-Culture teams due to

either,
0 Failed the readiness test
0 Registered late
0 About 12 are in this situation…

0 I shall arrange a meeting next week for us to discuss the way

forward.
the decision
matrix
-an introduction-
 -types of business questions/problems-
0 In consulting engagements, you will be presented with
a business problem or question.
0 Structured Questions and Problems
0 A question or problem is structured if there is a sequence
of operations that could solve it
0 A set of instructions to be followed to solve problem
0 These are often solved with an algorithm
0 This is the type of question or problem that technicians
often deal with
0 Little thinking is used…
0 Examples?
0 Which markets should a hedge fund company invest in?
 -types of business questions/problems-
0 Non-Structured Problems/Questions
0 There is no pre-packed answer or solution
0 More often you don’t know the problem before hand
0 You don’t know how to solve it even after identifying it
0There could be multiple solutions…
0 These are the type of issues that Managers/Consultants
often deal with
0 Examples?
0 The profitability of Brand X is poor. What should the company do?
0 Increase the price – increased CM
0 Reduce the price – increased volumes
How do we answer/solve non-structured
questions/problems?
 -solving consulting problems-

0 After being given a question or problem to solve, the

solution process starts with the collection of facts…
0 Using methods and sources such as interviews,
observation, company documents, and external
information, online data bases…
 -the symptom as the problem-
0 Along with basic facts, consultants are often also given
information about symptoms in the beginning of a
consulting process.
0 Symptoms are things that are not going well in the
organization, however, they are often not the real
problem or question that the organization wants/needs
to solve or answer.
0 So, consultants first need to make sure that they never
lose sight of the true problem or questions they are
trying to solve. Only addressing symptoms will not often
solve the problem or answer the root question.
 -the symptom as the problem-

Symptom What is the real problem?

Communications?
Menu?
Prices?
Low sales turnover Locations?
Rapport?
Understanding the customer?
e.t.c.
 --

0 After fact collection – you realise that the real problem is

not Low Sales Turnover but Communications/Rapport
and Understanding the customer.
0 Next step…

0Develop a FORMAL METHOD

of solving the problem
 -why use a formal method?-

0 It will help you analyze all the areas that are important
for the decision you need to make

0 It will help you justify your choice of solution to the

client

0 It will give the client more confidence in your

recommendations
 -formal method for
developing solutions-
0 Determine the criteria for the question or problem you
are trying to answer/solve
0 As mentioned, collect facts and make sure
you are focusing on the root problem or
question
0 Generate possible solutions (alternatives)
0 Evaluate all alternatives against specific criteria
0 Select a solution
0 Develop an action plan
 -relevant criteria-
0 Criteria are the factors that need to be considered to
answer a question or choose a solution
0 Criteria are very specific for every situation

Legal requirements
Political environment
Competitors
Possible Criteria for
Industry Structure
Market entry
Vision of client
Culture
Cost
 -common business decision criteria-
Quantitative Qualitative
Profit Competitive advantage
Cost Customer satisfaction
Return on investment Employee morale
Market share Corporate image
Capacity Ease of implementation
Delivery time Synergy
Risk Ethics
Cash flow Flexibility
Inventory turnover Safety
Productivity Visual appearance
Staff turnover Obsolesce
Quality Cultural sensitivity
Growth rate Motivation
Quantity Goodwill
 -feasible alternatives-
0 An alternative is a possible solution to a problem (or an
answer to a question)
0 They must be realistic and operational
0 After identifying possible alternatives, you need to assess
and quantify the impact of each alternative on the criteria
that are important to the client Exporting
Licensing
Possible Alternatives for Contract Manufacturing
Market entry? Joint Venture
Minority stake
Majority stake
Outright Acquisition
 -analyzing alternatives vs. criteria-
Alternatives
- Quantification
+ ++ -- + 1 - Assessment
+ - + -- 5
Criteria

++ -- -- + 2
+ + -- - 3
4 - Importance
-+ -+ ++ - of criteria

0 Rate the criteria based on how important they are

0 Assess the impact of the criteria on the alternatives
0 You can use a numerical scale (i.e. 1-10, or you can use a symbol-
based scale like --,-,-+,+,++)
0 (If you use a numerical system), multiply the ratings by the
weights to get total scores for each alternative
 -a new car example-
0 A camping enthusiast is about to replace his car. He needs
one that not only carries camping equipment and a tent,
but also one that will be good for business travel. He likes
open topped sports cars, no car he can find is good for all
three things.
0 His alternatives are: 0 Criteria that he wants to consider:
0 An SUV/4X4 hard topped 0 Cost
vehicle 0 Ability to carry camping equipment
0 A comfortable ‘family car’ safely
0 A station wagon 0 Ability to store equipment securely
0 A convertible sports car 0 Comfort over long distances
0 Fun
0 Look and build quality
 -conducting the analysis-

0 Each alternative is rated for each of the criteria (here

on a 0-3 scale, with 3 being the highest rating)
 -calculating the results-

0 Next, each criteria is weighted on importance (on a 1-5

scale), and the criteria ratings are multiplied by the weight
and totaled to get a final rating for each alterative.

0 Surprisingly, a station wagon is best?!

 -identifying criteria-
0 Recommending What Car to Buy (additional criteria)…
0 Maintenance costs
0 Reliability
0 Performance
0 Maker
0 Dealer
 -selecting the preferred
alternative-
0 Get multiple perspectives from your team
0 Always rely on your criteria vs. alternatives analyses as
you make your choice
0 Consider how each solution rated on each criteria,
especially the criteria that were ranked higher.
0 Since some criteria are qualitative, you usually should
make a “human” judgment call in the end (as a team) –
unstructured decisions are hard to make purely based on
the numbers.
 -preparing the report-
0 Discuss some background of your client and assignment
0 Discuss important factors to consider for your (criteria)
0 Discuss the importance of each factor (rating)
0 Discuss possible solutions (alternatives)
0 Discuss the weighting of each alternative (scale)
0 Prepare decision matrix (analysis)
0 Suggest a solution as according to the analysis
0 Implementation
0 E.g. in the case of a JV suggest a partner, how was the
partner selected…be thorough!
-Good day-