4-1Copyright 2009 McGraw-Hill Australia Pty Ltd PPTs t/a Managerial Problem Solving by WoodSlides prepared by Robert Wood, Julie Cogin and Jens Beckmann

Managerial Problem SolvingFrameworks, Tools, Techniques

Robert WoodJulie Cogin

Jens Beckmann

4-2Copyright 2009 McGraw-Hill Australia Pty Ltd PPTs t/a Managerial Problem Solving by WoodSlides prepared by Robert Wood, Julie Cogin and Jens Beckmann

Chapter 4

Solution Evaluation

4-3Copyright 2009 McGraw-Hill Australia Pty Ltd PPTs t/a Managerial Problem Solving by WoodSlides prepared by Robert Wood, Julie Cogin and Jens Beckmann

Affinity DiagramDefinition

• A simple technique for grouping and understanding information – it helps to organise unstructured ideas

• An effective way to identify and analyse issues generated during divergent thinking

• Includes items grouped together under different categories, which tie different concepts together

4-4Copyright 2009 McGraw-Hill Australia Pty Ltd PPTs t/a Managerial Problem Solving by WoodSlides prepared by Robert Wood, Julie Cogin and Jens Beckmann

Affinity DiagramWhen to Use

• Divergent thinking produces a large amount of information; affinity diagram will organise the ideas into groups for evaluation

• Best used at the beginning of convergent thinking or at the solution evaluation stage

• This technique works very well following a brainstorming or brainwriting session

4-5Copyright 2009 McGraw-Hill Australia Pty Ltd PPTs t/a Managerial Problem Solving by WoodSlides prepared by Robert Wood, Julie Cogin and Jens Beckmann

Affinity DiagramSimple Rules

• Can be done electronically or on paper• Any pre-existing information can be printed onto cards• While sorting and categorising items, physically get up

and gather around the area where the cards are placed

• Cards can be placed in more than one group if agreement cannot be reached

• Encourage all participants to contribute• Encourage participants to read their notes aloud• If one category is very large, consider splitting it

4-6Copyright 2009 McGraw-Hill Australia Pty Ltd PPTs t/a Managerial Problem Solving by WoodSlides prepared by Robert Wood, Julie Cogin and Jens Beckmann

Affinity DiagramSimple Steps

Step 1: Access data generated from the solution generation stage

Step 2: List ideas on post-it notesStep 3: Lay out cards on the surface where the diagram will

be constructedStep 4: Sort the ideas into similar groups, aiming for 5–10

categories. As each note is placed, other participants may add similar notes in close proximity.

Step 5: It may be worth spending some time considering and rearranging the groups

Step 6: When all ideas have been categorised, name each group. Place the name or header at top of each group.

4-7Copyright 2009 McGraw-Hill Australia Pty Ltd PPTs t/a Managerial Problem Solving by WoodSlides prepared by Robert Wood, Julie Cogin and Jens Beckmann

4-8Copyright 2009 McGraw-Hill Australia Pty Ltd PPTs t/a Managerial Problem Solving by WoodSlides prepared by Robert Wood, Julie Cogin and Jens Beckmann

Categorisation, Elimination and RankingDefinition

• Categorisation: organising ideas yielded in the solution generation stage into categories (e.g. affinity diagram)

• Elimination: entails following a rational approach to remove any ideas that do not meet essential criteria• A necessary step when you have many ideas and it is not

practical to consider each one in detail

• Ranking: a process where viable ideas are ranked against specified criteria

4-9Copyright 2009 McGraw-Hill Australia Pty Ltd PPTs t/a Managerial Problem Solving by WoodSlides prepared by Robert Wood, Julie Cogin and Jens Beckmann

Categorisation, Elimination and Ranking When to Use

• Categorising, elimination by aspects, voting and ranking are all useful during convergent thinking when the aim is to narrow ideas down from a large set to a smaller high quality set

• Best used during solution evaluation

4-10Copyright 2009 McGraw-Hill Australia Pty Ltd PPTs t/a Managerial Problem Solving by WoodSlides prepared by Robert Wood, Julie Cogin and Jens Beckmann

Categorisation, Elimination and Ranking Simple Rules

• If working in a group setting, decide how to decide• How will voting be carried out? • Will the majority rule? • Will voting be a private ballot? • Will one person have final say?

• Needs to be undertaken before beginning to screen and evaluate ideas

4-11Copyright 2009 McGraw-Hill Australia Pty Ltd PPTs t/a Managerial Problem Solving by WoodSlides prepared by Robert Wood, Julie Cogin and Jens Beckmann

Categorisation, Elimination and Ranking Simple Steps

If ideas are already organised into a framework, skip step 1

Step 1: Generate category labels• Place ideas in the most relevant category

Step 2: Agree on essential criteria• Decide on two or three essential criteria that all ideas must meet

(including feasibility of implementation!). Be specific.

Step 3: Elimination OR voting and ranking

Step 4: Number ideas sequentially

Step 5: Rank top five ideas• Each group-member should do this

Step 6: Collate the votes• Do this by listing all the ideas and the rankings each received

4-12Copyright 2009 McGraw-Hill Australia Pty Ltd PPTs t/a Managerial Problem Solving by WoodSlides prepared by Robert Wood, Julie Cogin and Jens Beckmann

Screening MatrixDefinition

• A simple and transparent way of selecting a number of ideas that best meet dual criteria

• Provides a visual representation of the suitability of ideas against defined criteria

4-13Copyright 2009 McGraw-Hill Australia Pty Ltd PPTs t/a Managerial Problem Solving by WoodSlides prepared by Robert Wood, Julie Cogin and Jens Beckmann

Screening Matrix When to Use

• Best used during solution evaluation, when it becomes necessary to conduct an initial critique of ideas

4-14Copyright 2009 McGraw-Hill Australia Pty Ltd PPTs t/a Managerial Problem Solving by WoodSlides prepared by Robert Wood, Julie Cogin and Jens Beckmann

Screening Matrix Simple Rules

• Before beginning, make sure there is agreement on how decisions will be made

• Will the group vote? • How will voting be carried out (public or private)?

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Screening Matrix Simple Steps

Step 1: Criteria to evaluate• Identify the two most important criteria

Step 2: Rate each solution against each of the two criteria• Working individually, decide if each solution is high, medium or

low on the criteria (or use numerical scoring)• In a group, either discuss ratings for each idea and come to

consensus or take an average rating

Step 3: Plot ratings of solutions on the screening matrix• Place each solution on the screening matrix according to the

scores it receives. Ideas high on both dimensions will be placed in the top left hand corner.

4-16Copyright 2009 McGraw-Hill Australia Pty Ltd PPTs t/a Managerial Problem Solving by WoodSlides prepared by Robert Wood, Julie Cogin and Jens Beckmann

4-17Copyright 2009 McGraw-Hill Australia Pty Ltd PPTs t/a Managerial Problem Solving by WoodSlides prepared by Robert Wood, Julie Cogin and Jens Beckmann

Decision MatrixDefinition

• A chart that allows a team or an individual to systematically identify, analyse and rate the strength of relationships between sets of information

• Especially useful for looking at large numbers of decision factors and assessing each factor’s relative importance

4-18Copyright 2009 McGraw-Hill Australia Pty Ltd PPTs t/a Managerial Problem Solving by WoodSlides prepared by Robert Wood, Julie Cogin and Jens Beckmann

Decision Matrix When to Use

• Can be useful in selecting an improvement project, evaluating alternative solutions to problems, and in designing remedies

• Most frequently used during solution evaluation

4-19Copyright 2009 McGraw-Hill Australia Pty Ltd PPTs t/a Managerial Problem Solving by WoodSlides prepared by Robert Wood, Julie Cogin and Jens Beckmann

Decision Matrix Simple Rules

• In a group setting, ensure that all members understand the criteria against which each solution is judged • Clarify and discuss the criteria before beginning

• All group members should understand what each score represents

4-20Copyright 2009 McGraw-Hill Australia Pty Ltd PPTs t/a Managerial Problem Solving by WoodSlides prepared by Robert Wood, Julie Cogin and Jens Beckmann

Decision Matrix Simple Steps

Step 1: Set up• List all viable options for solving the problem; draw up a table

Step 2: Identify decision/selection criteria• Write criteria so that a high score = favourable result, low score =

unfavourable result

Step 3: Assign weightsStep 4: Design scoring system• Agree on a scoring system and ensure it is clearly understood

Step 5: Rate the alternatives• For each alternative, assign a consensus rating for each criterion

Step 6: Total the scores• Multiply the score for each decision criterion by its weighting factor.

Tally the scores for each alternative; analyse the results.

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4-22Copyright 2009 McGraw-Hill Australia Pty Ltd PPTs t/a Managerial Problem Solving by WoodSlides prepared by Robert Wood, Julie Cogin and Jens Beckmann

Pareto AnalysisDefinition

• Employs the Pareto Principle (80–20 rule): 80 percent of effects are produced by 20 percent of causes

• The output of a Pareto analysis is a Pareto chart• A vertical bar graph showing problems in a prioritised order• Helps to determine which problems should be tackled first or

which of several classifications have the greatest cost associated with them

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Pareto Analysis When to Use

• Can be used during problems definition• If a number of root causes (or issue attributes) of a problem

are competing for your attention, Pareto analysis can help determine which causes should be dealt with first

• More commonly used in combination with a fishbone during the solution evaluation stage• Each of the categories on the spine of the fishbone is used to

collect data• Pareto chart then counts the frequency of different causal

factors to identify core causes of a problem

4-24Copyright 2009 McGraw-Hill Australia Pty Ltd PPTs t/a Managerial Problem Solving by WoodSlides prepared by Robert Wood, Julie Cogin and Jens Beckmann

Pareto Analysis Simple Rules

• Need a list of the problems faced, or options available for solving the problem

• Generally requires some form of data tracking• Data must be ‘counts’ or ‘costs’, and must be additive • Data shown as yields or percentages cannot be

added, so are inappropriate for Pareto analysis • Carefully consider the time period over which the data

should be collected

4-25Copyright 2009 McGraw-Hill Australia Pty Ltd PPTs t/a Managerial Problem Solving by WoodSlides prepared by Robert Wood, Julie Cogin and Jens Beckmann

Pareto Analysis Simple Steps

Step 1: List causes• If list is long, group each cause into related categories

Step 2: Collect data on the frequency of the causes of a problem

• Rank causes from most to least important• Calculate cumulative percentage

Step 3: Horizontal axis• Draw horizontal axis (X) representing different causes, ordered

from most to least frequent

4-26Copyright 2009 McGraw-Hill Australia Pty Ltd PPTs t/a Managerial Problem Solving by WoodSlides prepared by Robert Wood, Julie Cogin and Jens Beckmann

Pareto Analysis Simple Steps

Step 4: Vertical axis• Draw a vertical axis (Y) with percentages from 0 to 100%

Step 5: Construct a bar graph based on percentage of each cause

Step 6: Construct a line graph of the cumulative percentage

Step 7: 80% line• Draw a line from 80% on Y axis to the line graph and then drop

the line down to the X axis• This line separates important causes from trivial ones

4-27Copyright 2009 McGraw-Hill Australia Pty Ltd PPTs t/a Managerial Problem Solving by WoodSlides prepared by Robert Wood, Julie Cogin and Jens Beckmann