Cracked It! (Book Summary)

 Cracked it!: How to solve big problems and sell solutions like top strategy consultants by Bernard Garrette; Corey Phelps; Olivier Sibony

1. The Most Important Skill You Never Learned

• When we stop presuming we know what’s going on, and instead question the sufficiency of the information we possess and search for more, we become more likely to overcome our assumptions and see the problem differently, enabling us to generate different and potentially better solutions.
• While analogical reasoning can be a valuable source of insight and creativity, it can lead to poor solutions when problem-solvers develop analogies based on superficial similarities instead of deep causal traits.
• Many business problems are complex, ill-defined, and non-routine.
• Just because something is unknown, however, doesn’t mean it’s unknowable. Many unknowns are unknown because problem solvers fail to spend the time, effort, and resources to recognize the unknown aspects of a problem.

2. The Five Pitfalls of Problem Solving

• Most errors arise from one or several of the (following) five pitfalls:
  • First, a flawed problem definition can lead to irrelevant solutions.
  • Second, confirmation bias can lead problem solvers to believe a solution is valid without testing it and ignore evidence that it won’t work.
  • Third, choosing the wrong framework to understand a problem can blind us to important aspects of the issue, leading us to develop ineffective and costly solutions.
  • Fourth, narrow problem framing can stimulate superficial analogies, resulting in inappropriate solutions.
  • Finally, even if we overcome the first four pitfalls, valuable solutions don’t sell themselves. Solving the problem is worthless if you can’t convince decision-makers to adopt the solution
• Rather than beginning with the problem — child nutrition — and analyzing it to find a relevant and cost-effective solution, Danone and Grameen started from the potential solutions they (already) had to offer.
• When we face complex, human-centered problems that we understand poorly, we should avoid framing them by analogy with other situations. Instead, we should invest in understanding problems from the perspective of the people who experience them.

3. The 4S Method

• State, Structure, Solve, and Sell.
• To overcome confirmation bias, actively seek disconfirming evidence.
• Consultants aren’t immune to this bias, but they’ve developed at least three safeguards against it.
  • First, as outsiders, they have, in principle, no vested interest in the recommendation
  • Second, consultants work in teams and are trained to challenge one another.
  • Finally, consultants learn and practice PSAC continually. Rookies are taught that their task, once a hypothesis is formulated, is to work diligently to either prove or disprove it.
• Much business problem solving consists of identifying tried-and-tested solutions to complex problems, not in finding novel solutions to them.
• Use design thinking when the problem is complex and poorly understood, and when the solution must be designed for and used by people.
• Design thinking is a form of abductive reasoning. Abduction takes place when you use a limited set of observations to generate the most plausible and parsimonious explanation for the data
• STATE
  • The first question may not be “What is the problem?” but “Do I know enough to state the problem?”
  • Writing a full problem statement requires you to examine five elements of the problem — abbreviated in the acronym TOSCA (Trouble, Owner, Success criteria, Constraints, Actors).
• STRUCTURE
  • List the conditions that must be true for a hypothesis to be a solution; then, disaggregate these conditions into smaller requirements.
  • The hypothesis-driven approach increases the risk of confirmation bias and exposes you to the solution confirmation pitfall
  • An issue-driven approach requires you to break down the problem into smaller components with an issue tree
  • Design thinking practitioners use what they learned about what is (in the “State” phase) to then imagine what should be.
• SOLVE
  • Ask oneself whether a potential solution meets the success criteria one had predefined
  • Issue trees disaggregate problems, but not all problems can be solved by being disaggregated
• SELL
  • Business problem solvers usually can, and should, interact with their audience from the very beginning and throughout the problem-solving process.
  • Finding the best solution is one task, selling it is another, and shouldn’t start before you’re sure the problem is solved.
• The problem-solving process is inherently iterative.
• Refining the problem statement is a crucial part of structuring and solving a problem.

4. State the Problem: The TOSCA Framework

• TROUBLE: What makes this problem real and present?
  • The basic definition of “trouble” is a gap between an observation and an aspiration.
  • When we ask about the trouble, we focus on the specific, urgent symptoms.
  • Don’t let interpretation (or solution ideas) creep into your definition of “trouble.”
• OWNER: Whose problem is this?
  • The identity of the problem owner shapes the potential solution space, and hence the problem definition
  • If you don’t know who’s on the hook to solve the problem, you can never define or solve it.
• SUCCESS CRITERIA: What will success look like, and when?
  • The actual objectives the owners are pursuing by a certain date.
• CONSTRAINTS: What are the limits on the solution space (e.g., resources, timeline, and context)?
  • You should define constraints from the perspective of the problem owner
  • The owner’s resources and capabilities may also impose constraints on the solution.
  • Discussing constraints early on can save you time and effort.
• ACTORS: Who has a say in the way we solve this problem, and what do they want?
  • It’s indispensable to understand their objectives and the stakes they have in the problem.
• Once we answer the TOSCA questions, it becomes possible to state the core question that will guide the problem-solving effort.
• Write the Core Question Now that you’ve completed the five TOSCA steps, you can write the core question you’ll answer.
  • It should be a question, not a statement.
  • Choose between an open-ended question and a closed-ended question. The harder the problem is and the earlier you are in the problem-solving process, the more likely it is that a broad question scope will be preferable.
  • Does the question address the trouble that got you to consider the problem in the first place?
  • Is the question phrased from the perspective of the owner?
  • Would answering this question meet success criteria?
  • Does the question recognize the constraints?
  • Does the question consider relevant actors?
  • Without empathizing with all the actors, the problem statement can’t be complete.
  • Example: “In a context where young consumers are increasingly downloading pirated music files, and knowing that enablers of that behavior — broadband access and digital playback device — are bound to become more accessible, what actions can we take that would result in restoring an X-percent revenue growth rate, with a minimum return on sales of Y percent, in three years’ time?”

5. Structure the Problem: Pyramids and Trees

• Hypothesis-driven problem solving: You’ll start with your leading hypothesis and break it down into sub-hypotheses that are conditions for it to be true. You might also break these first-level conditions into sub-sub-hypotheses, until they are specific enough to be proven or disproven by analyses, facts, and data
• Limit the use of hypothesis-driven thinking to two cases only:
  • You have strong reasons to believe in your hypothesis.
  • You don’t have the luxury of building an issue tree.
• Necessary conditions are conditions that cannot be wrong if the hypothesis is true.
• A sufficient condition is enough to prove a hypothesis is true, but a sufficient condition can be wrong even though the hypothesis is true:
• Proving one sufficient condition right is enough to validate a hypothesis, while proving one necessary condition wrong is enough to reject it.
• Sufficient conditions are rare in business problems.
• MECE:
  • “Collectively exhaustive” means we’ve identified all possible conditions to provide logical support for the hypothesis.
  • In addition to being collectively exhaustive, the conditions must not overlap. In other words, they should be mutually exclusive.
• Identifying candidate solutions based only on what can be sold to an audience is dangerous.
• Issue-driven problem structuring consists of decomposing the problem into MECE issues and sub-issues that you can solve one by one.
• While hypothesis pyramids consist of hypothetical statements, issue trees consist of questions.
• In most problems, a minority of key factors plays a major role.

6. Structure the Problem: Analytical Frameworks

• Analytical frameworks are prepackaged, MECE breakdowns of typical problems.
• A good discipline is to break down complex problems using multiple frameworks.
• Every industry has frameworks that reflect the industry’s value drivers, the important levers of value creation in the business.
• Changing frameworks is especially important when the industry is changing.
• Types of frameworks:
  • Functional Frameworks (Porter’s Five Forces model, for instance, is useful to address only one question: “Is this industry attractive for investment?”)
  • Formula frameworks connect a result and its components.
  • Typology frameworks list different categories of things.
  • Checklist frameworks, finally, are similar to typologies, but are lists in which all elements must be present simultaneously for a condition to be true.
• Multiple frameworks are also the reason solving problems is often more effective — and sometimes more difficult — when you work in teams. It’s more effective than working solo because different team members have different mental models and different frameworks to leverage.
• An effective problem solver is not only someone who masters multiple frameworks, but also someone who excels at combining these frameworks (and the ones contributed by other team members) into an integrative problem structure.

7. Solve the Problem: Eight Degrees of Analysis

• With any solution, consider what new problems implementing it might create
• You must identify, for each elementary hypothesis:
  • (1) what you must know to test the hypothesis
  • (2) how you will get that information.
• “Analyses” can be thought of as a continuum that starts with accepted or indisputable facts and ends with subtle judgments.
• Once you’ve identified which type of analysis can settle each elementary hypothesis, you can plan the work and conduct the analysis.  Two considerations, however, are universal:
  • First, start with the critical, “make or break” hypotheses, especially when they’re relatively easy to test.
  • Second, ensure assumptions are explicit and internally consistent. Also, benchmark your assumptions and test sensitivities.
• If it looks wrong, it probably is; f it looks right, it may still be wrong.
• Have someone else challenge your analysis.

8. Redefine the Problem: The Design Thinking Path

• Design thinking is a disciplined process for solving human-centered, complex problems that are poorly understood by solution developers.
• The five phases of design thinking — Empathize, Define, Ideate, Prototype, and Test

9. Structure and Solve the Problem Using Design Thinking

• Ideation tips
  • Diversify the Team (Research has consistently found that divergent thinking is one of the strongest predictors of creative problem solving.)
  • Defer Judgment
  • Go for Quantity
  • Be Visual
  • Stay Focused on the problem and the users
  • Think in analogies (though not exclusively in analogies)
  • Encourage wild ideas
  • Build on the ideas of others
  • One conversation at a time
  • Brainwriting: In brainwriting, participants independently generate a targeted number of ideas (e.g., three or four), or as many ideas as they can, without interacting with each other. Participants then share ideas with one another.
• Morphological Analysis: Break products or services into attributes.  Then, identify all the states each attributes can have.  Finally, explore new ideas by searching for combinations of states that don’t yet exist.
• The acronym SCAMPER stands for Substitute, Combine, Adapt, Modify, Put to some other use, Eliminate, and Reverse.
• The promise of design thinking is that it demystifies creativity. It represents a disciplined process and a set of tools that can empower you to generate and pursue new ideas for solutions to challenging problems.

10. Sell the Solution: Core Message and Storyline

• Don’t Tell the Story of the Search, Tell the Story of the Solution
• Get straight to the point from the get-go. The core message must jump off the page immediately and pave the way for the later points that collectively justify or detail it.
• When you give an oral presentation, you’ll organize it as follows:
  • You’ll state the core message first (including the problem and your proposed solution)
  • Then present the key line
  • Then walk the audience through each “pillar” of the pyramid by discussing one by one the clusters of detailed points that support the key line.
• A strategic recommendation is controversial by nature. Triggering a discussion is what it’s supposed to do. Generating a dialogue — including objections — is nothing to fear, success is.
• The key line that supports the governing thought must contain the answers to “why” and “ how” questions. The key line has two functions: to establish the pyramid structure of your presentation and to answer the main questions the core message triggers. This will enable you to manage your conversation with the problem owner.
• Induce questions you can answer.
• Don’t produce visuals before you’ve zeroed in on the story you want to tell.
• Summarizing isn’t enough. You must synthesize findings and overcome contradictions by constantly asking the “So what?” question.
• Each level can either be a (inductive) grouping or a (deductive) argument
  • In a grouping pattern, the key line consists of points of the same kind that collectively support or detail the core message.  Start with the most important items. It’s indispensable to ensure the grouping is MECE at each level.
  • An “argument” follows a key line of reasoning that goes from premises to conclusions. The most convenient and common way to build an argument is to use the “situation – complication – (question) – resolution (SCR)” key line.
• In practice, you can choose between an argument and a grouping at each level and in each pillar of the pyramid
• Using a grouping structure with an audience that initially disagrees with you can be perceived as too blunt, or downright rude.
• The ultimate objective of solution selling isn’t to gain intellectual support for your solution, but to trigger action

11. Sell the Solution: Recommendation Report and Delivery

• If you’re about to pitch your solution to the problem owner, it shouldn’t be the first meeting you’ve had with her since she entrusted you with solving the problem.
• To avoid surprises, schedule intermediary checkpoints with the problem owner during the problem-solving process.
• Ideally, when you step into the final meeting, no one will be surprised by your analyses and facts or disagree with them.
• Your report will include four kinds of pages (or slides):
  • The executive summary page with the governing thought and the key line.
  • One storyline page for each key-line point.
  • One content page for each elementary message.
  • As many backup pages as needed.
• Slides should have three main components:
  • The action title
  • A tracker indicating the specific point in the storyline
  • The content itself, illustrating the analytical finding
• The key to effective data visualization is to know what you want to see jump off the page.
• Resist the temptation to embellish visuals with unnecessary colors, animations, 3D or perspective effects, transitions, and other gimmicks
• Presentations with fewer slides are better.
• As the French writer Antoine de Saint-Exupéry wrote: “Perfection is attained not when there is nothing more to add, but when there is nothing more to remove.”

12. The 4S Method in Action

(a good example, but no new “how-to” content in this chapter)

13. Conclusion: Becoming a Master Problem-Solver

• There is a reason problem-solving and communications skills are difficult to teach and to learn: they require practice.
• An essential aspect of becoming a better problem solver is to practice with others.