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

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

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

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

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

4-6 Copyright  2009 McGraw-Hill Australia Pty Ltd PPTs t/a Managerial Problem Solving by Wood Slides prepared by Robert Wood, Julie Cogin and Jens Beckmann Affinity Diagram Simple Steps Step 1: Access data generated from the solution generation stage Step 2: List ideas on post-it notes Step 3: Lay out cards on the surface where the diagram will be constructed Step 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.

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

4-8 Copyright  2009 McGraw-Hill Australia Pty Ltd PPTs t/a Managerial Problem Solving by Wood Slides prepared by Robert Wood, Julie Cogin and Jens Beckmann Categorisation, Elimination and Ranking Definition 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

4-9 Copyright  2009 McGraw-Hill Australia Pty Ltd PPTs t/a Managerial Problem Solving by Wood Slides 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

4-10 Copyright  2009 McGraw-Hill Australia Pty Ltd PPTs t/a Managerial Problem Solving by Wood Slides 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

4-11 Copyright  2009 McGraw-Hill Australia Pty Ltd PPTs t/a Managerial Problem Solving by Wood Slides 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

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

4-13 Copyright  2009 McGraw-Hill Australia Pty Ltd PPTs t/a Managerial Problem Solving by Wood Slides 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

4-14 Copyright  2009 McGraw-Hill Australia Pty Ltd PPTs t/a Managerial Problem Solving by Wood Slides 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)?

4-15 Copyright  2009 McGraw-Hill Australia Pty Ltd PPTs t/a Managerial Problem Solving by Wood Slides prepared by Robert Wood, Julie Cogin and Jens Beckmann 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.

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

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

4-18 Copyright  2009 McGraw-Hill Australia Pty Ltd PPTs t/a Managerial Problem Solving by Wood Slides 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

4-19 Copyright  2009 McGraw-Hill Australia Pty Ltd PPTs t/a Managerial Problem Solving by Wood Slides 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

4-20 Copyright  2009 McGraw-Hill Australia Pty Ltd PPTs t/a Managerial Problem Solving by Wood Slides 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 weights Step 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.

4-21 Copyright  2009 McGraw-Hill Australia Pty Ltd PPTs t/a Managerial Problem Solving by Wood Slides prepared by Robert Wood, Julie Cogin and Jens Beckmann

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

4-23 Copyright  2009 McGraw-Hill Australia Pty Ltd PPTs t/a Managerial Problem Solving by Wood Slides prepared by Robert Wood, Julie Cogin and Jens Beckmann 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

4-24 Copyright  2009 McGraw-Hill Australia Pty Ltd PPTs t/a Managerial Problem Solving by Wood Slides 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

4-25 Copyright  2009 McGraw-Hill Australia Pty Ltd PPTs t/a Managerial Problem Solving by Wood Slides 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

4-26 Copyright  2009 McGraw-Hill Australia Pty Ltd PPTs t/a Managerial Problem Solving by Wood Slides 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

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