Structured Problem Diagnosis - The 3 steps - Where is the problem?

6 important questions on Structured Problem Diagnosis - The 3 steps - Where is the problem?

Based on the issue tree that you made to Decompose the gap by drivers, how can another Issue Tree then help you further again?

Diving into one of the drivers because you believe the issue is there.

What is key when you want to find 'Where the problem is?' and which 3 points can help you with this?

Before investigating, create focus!

  1. Segment into categories (i.e. Countries, products, markets & distribution channels)
  2. Find an uneven distribution (which segments have highest percentage)
  3. Follow the 80/20 (Pareto Principle)

What is the purpose of decomposition and and what does it point towards?

The purpose of decomposition is to identify an uneven distribution of the result gap and this unevenness points to the Pareto Principle.
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What does '80/20 rule' entail that the Pareto Principle follows?

20% of the explanatory factors explains 80% of the results.

What are the 3 caveats (a warning) that can be identified when it comes to segmenting?

  1. Avoid the trap of the average
    1. Uneven distribution
  2. Uncover hidden gaps
    1. Largest gap may be hidden
  3. Interdependencies between segments
    1. Transfer pricing

How can the 3 caveats that can be identified when it comes to segmenting be avoided by consultants?

By uncovering the distribution of the overall result gap.

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