Business Consulting Services
Jeffrey M. Kurtz
Agenda
•
•
Problem Definition discussion
Problem Definition Exercise
•
Objectives:
1.
2.
Understand the Problem Definition Process
Be Able to Define a Client’s Problem
Ultimate Goal
“Here”
How Do You Get “Here”?
Get Here
5 Fatal Flaws of Consulting
1.
2.
3.
4.
5.
Projects not defined in terms of client results
Unrealistic solutions – beyond the resources
Unrealistic solutions – one big change
Non-collaborative consulting
Labor intensive use of consultants (instead
of leveraged use)
Good Consulting Techniques
1. Project goals are defined in terms of measurable
improvements in client bottom-line results.
2. Project scope determined by assessing what the client
organization will be willing and able to absorb and
implement.
3. Projects divided into steps to produce rapid results and
experience that lay foundation for further progress.
4. Client and consultant work together as partnership at every
stage of the project.
5. Client teams take major responsibility for the project, and
consultants provide unique, focused support.
What’s a Problem?
Something that isn’t right that has finally
reached the point that it can’t be ignored
any longer.
Ultimate Goal
“Here”
How Do You Get “Here”?
Get Here
Problem Definition
Excellent Consulting
begins with
Accurate
Problem Definition
Problem Definiton
What is the difference between
The Symptoms and The Problem?
Presenting Problems = Symptoms
Symptom - Back Pain
Ask questions:
Where? In the middle of my back &
sometimes my neck.
How long? About 2 hours.
When does it hurt? It started when I was
shoveling snow. It goes away if I sit
down and rest.
Are there any significant medical issues in
your family? Dad died from a heart
attack.
Do Research:
Check Pulse – rapid
Check BP – high
Check Breathing – labored and shallow
Check Skin – pink, cool and damp
Hypothesis: Heart attack.
Treatment: Immediate cardiac care.
Symptom - Back Pain
Ask questions:
Where? In the middle of my back.
How long? About 2 hours.
When does it hurt? It started when I was
shoveling snow. It goes away if I sit
up straight and don’t turn my head.
Are there any significant medical issues
in your family? No.
Do Research:
Check Pulse – normal
Check BP – normal
Check Breathing – slightly elevated and
shallow
Check Skin – pink, warm & dry
Hypothesis: Strained back muscles.
Treatment: Ibuprofen, heat, relaxation.
Presenting Problems = Symptoms
Symptom - Back Pain
Ask questions:
Where? In the middle of my back &
sometimes my neck.
How long? About 2 hours.
When does it hurt? It started when I was
shoveling snow. It goes away if I sit
down and rest.
Are there any significant medical issues
in your family? Dad died from a
heart attack.
Do Research:
Check Pulse – rapid
Check BP – high
Check Breathing – labored and shallow
Check Skin – pink, cool and damp
Hypothesis: Heart attack.
Treatment: Immediate cardiac care.
Symptom - Back Pain
Ask questions:
Where? In the middle of my back.
How long? About 2 hours.
When does it hurt? It started when I was
shoveling snow. It goes away if I sit
up straight and don’t turn my head.
Are there any significant medical issues
in your family? No.
Do Research:
Check Pulse – normal
Check BP – normal
Check Breathing – slightly elevated and
shallow
Check Skin – pink, warm & dry
Hypothesis: Strained back muscles.
Treatment: Ibuprofen, heat, relaxation.
Presenting Problems
Presenting Problem – Profitability
Presenting Problem – Profitability
Ask Questions:
What has happened to sales?
Remained steady.
What has happened to expenses?
Increased
What areas have increased the most?
Cost of Goods Sold (COGS)
Why? I’m not sure.
Ask Questions:
What has happened to sales?
Declined.
What has happened to expenses?
Increased slightly.
What products have declined the
most? Our pink widgets.
Why? I’m not sure.
Research:
 Industry Norms
 Historical – COGS% up
 Break down components of COGS
– shipping costs 30% above
industry norm.
Research:
 Industry Norms
 Historical – Pink & Striped widget
sales are down
 Competition, trends, pricing, etc.
Hypothesis: Examine ways to lower
shipping costs of raw materials.
Hypothesis: Competition has
increased in the Pink widget
business and technology has made
Striped widgets unnecessary.
Presenting Problems
Presenting Problem – Profitability
Presenting Problem – Profitability
Ask Questions:
What has happened to sales?
Remained steady.
What has happened to expenses?
Increased
What areas have increased the most?
Cost of Goods Sold (COGS)
Why? I’m not sure.
Ask Questions:
What has happened to sales?
Declined.
What has happened to expenses?
Increased slightly.
What products have declined the
most? Our pink widgets.
Why? I’m not sure.
Research:
 Industry Norms
 Historical – COGS% up
 Break down components of COGS
– shipping costs 30% above
industry norm.
Research:
 Industry Norms
 Historical – Pink & Striped widget
sales are down
 Competition, trends, pricing, etc.
Hypothesis: Examine ways to lower
shipping costs of raw materials.
Hypothesis: Competition has
increased in the Pink widget
business and technology has made
Striped widgets unnecessary.
Defining the Problem
1. Uncover the
Presenting Problems.
2. Identify the key
questions to ask and
investigate further.
3. Answer the key
questions and define
the overall issue.
4. Define a course
of action.
Issue Decomposition
Issue Decomposition = A tool to define/structure key
questions to be answered to solve a business issue (i.e.,
Issue Tree)
Issue Tree Enables You to:
• Clearly state a business problem
• Understand the business problem’s key drivers and components
• Identify interrelationships between factors
• Comprehensively answer/address the business problem
• Organize efforts to collect relevant information
• Communicate your approach, and, eventually, your
recommendations in a logical fashion
FRAMING THE PROBLEM – ISSUE TREE EXAMPLE
Problem: How can the Acme Widget
Company increase profits from
its existing business lines?
FRAMING THE PROBLEM – ISSUE TREE EXAMPLE
How can
Acme
increase
profits from
existing
business
lines?
from McKinsey Consulting
FRAMING THE PROBLEM – ISSUE TREE EXAMPLE
Which
Business
Lines?
From
Widgets
How can
Acme
increase
profits from
existing
business
lines?
From
Thrum-mats
From
Grommets
from McKinsey Consulting
FRAMING THE PROBLEM – ISSUE TREE EXAMPLE
Which
Business
Lines?
How?
From
Widgets
How can
Acme
increase
profits from
existing
business
lines?
Increase
Revenues
From
Thrum-mats
Decrease
Expenses
From
Grommets
from McKinsey Consulting
FRAMING THE PROBLEM – ISSUE TREE EXAMPLE
Which
Business
Lines?
How?
From
Widgets
How can
Acme
increase
profits from
existing
business
lines?
Increase
Revenues
From
Thrum-mats
Decrease
Expenses
From
Grommets
How?
Decrease
raw
material
costs
Decrease
labor costs
Decrease
overhead
costs
from McKinsey Consulting
FRAMING THE PROBLEM – ISSUE TREE EXAMPLE
Which
Product
Lines?
How?
From
Widgets
How can
Acme
increase
profits from
existing
business
lines?
Increase
Revenues
How?
Decrease
raw
material
costs
How?
Negotiate wage concessions
From Thrummats
Decrease
Expenses
From
Grommets
Decrease
labor costs
Decrease
overhead
costs
from McKinsey Consulting
Negotiate higher productivity
quotas
Implement a labor-saving
production process
Issue Tree- MECE
•The number of primary questions and the
number of question tiers is dependent upon
the business issue being addressed.
•ME = Mutually Exclusive = Ensure that that no
overlaps exist.
•CE = Collectively Exhaustive = Ensure that all
aspects of the business issue are considered.
MECE example
Case Practice as Team
STC
As a team, work for 30 minutes to
1. Define the Problem
2. Present it to the class
Reminder
• Client presentations will be held on:
• ENG – Wednesday class time.
• BA - Thursday evening from 6:30 to ~ 8 p.m.
• Please dress “business casual” for that session.
Thanks!