Session 1 2 Procedure of Problem Solving I

so here's the outline I have been mentioning about the recommended steps of solving a problem step by step and here's our plan so today we are going to cover from step one to step three and in the next class we are going to cover start for in the five so first the five steps are define a question step at a major transit data to the calculation and understand result so first that is define a question basically what isn't problems we are facing and the what's the problem we are trying to solve and for this particular step the deliverable is a problem statement clearly to state what's the problem we are solving and that this is the very into straight forward path but the truth is many managers and analysts they failed in the first step and the consequence is the solution is not really well rounded and another informed decision is made and the consequence can be disastrous sometimes so that's why we are going to start with the discussion of the first step and welcome to going to talk about how important it is as well as how we have a truth a balanced problem statement so first time why define problem is important because the final write problem is basically a half way through the solution so you already started a tone about whether you can find a good solution why you try to formulate your business problems so this is actually very important so basically one developing new products made most companies actually sufficiently consider their problem they are solving another consequence usually is very severe so the least severe calm consequence is is a run problem they are solving they are solving a problem which is not here that's a waste of resources but the worst of the all the worst of the outcome is basically the wrong direction attentively can lead to the company to the tune so that's actually the significance of of problem definition and then without this rigor that's going to be a lot of problems so let me give you an example about the power of a problem definition so this is the problem of seven years ago so at the time axon is basically having a pretty big accident in the oil spill so that's polluted a seesaw a lot of lawsuit and a lot of a clinical effort so at end of the day accident have to basically clean up the ski shop clean up the oil pollution by the time they are encountering a problem because it C is really cold and in the winter the crude oil have this physical property to become more sticky so physically is like a coda viscosity so when it becomes really sticky it's really difficult to clean up and we are not looking at you know account yard we are looking at a Coast so that becomes a huge challenge for axon so they run out of the options within their organization so what they do is that were crossing back in the days - look publicly look for solutions those so they solicit suggestions about how to deal with this problem and with like million-dollar rewards and they have a debate with their team about how to publicize how to make a problem statement so that they have truth the best outcome of the solution so I gave the tape there are two diverge the views about how they show the frame the problem to the public so one way is they try to make the problem very straightforward physically we are solving an oil spill problem with this leaky oil in the system that's basically kind of one of the problem they are trying to free to the public for solution and the other views which shouldn't have formulated as oil clean up the problem we should have formulated in a more broader way so instead of saying what it is the other team argent proposed was should have formulated as a higher level so instead of the same is all you clean up the other team recommends we should say is either in this faithful form so basically that's a problem of solving this viscosity liquid or with causative problems basically how to clean it up or how to how to move it remove it and the argument for the second team is by hybrid is defined as a physical problem but actually you are proud of your audience so when you are just defined a problem as all your skill problem clean up the problem you are only in fact you only expect the attention of the audio experts are around the globe in the lab or in companies but if you define it as the physical problems potentially the people who are working in physics or chemistry or other industries potentially they kind actually are also contributes the idea so they may actually have something some salt which the all you are the gas industries haven't even think about so I did another day or the second team actually call me Zach so they publicize the problem as a physical problem per se instead of Ramin it as all your clean problem so the result is that the fastest solution is turns out as expected are coming are coming from expert from the other industry so is a chemist from the cement industry at least address a solution and even better they actually has been dealing with this kind of a sticky material for some time the chemist even have known an equipment in their own industry so a simple modification can make the work to clean up the see shop with this with conscious of oil spill on a see shop so this actually shows you one dimension also the importance of the common definition the rather common definition is as I mentioned it's halfway to the solution yes here the element is why you consider the promise statement you are considering the scope of the problem so if you define it to now this is a case over you know you are trying to solicit ideas and in this case if you define a problem in a so narrow way that what's going to happen is that you are actually having your kundo getting the solution from a limited pool of talents and a define the problem in this case in a broader way actually increase your chance to get a better solution so that's actually shows you you see the same problem while you three mate in a different way it can lead to different outcomes so imagine if axon and the time just give the question as I will clean up problem will this chemist in the cement industry we are even actually pay attention they may actually work on our sub optimal solution is that the getting this really convenient solution so this is the first example to show you the importance of definition so here is another example this is about problem definition can also lead to drastic difference in the corporate strategies so here is a comparison of two apps one is the whatsapp the other is called a bitch hat so this are two of the largest changing track one and if you are called a manager essentially you are solve your problem you are solving a problem with your customers and the while you develop a product you are pretty much starting to ask the following question what what problem I'm trying to solve for my customers and this is basically if you go to any product page usually the first sentence is this problem statement and then later when they have the product it becomes a mission statement of the product so here is what I copied from their webpage so for whatsapp what they are saying is they are trying to the statements it is the premise that means they try to help people to stay in touch with friends families anytime and anywhere and it's in a secure simple and reliable manner so that's how they define what's what's at least one what problem they are trying to solve using this product so koalas have so essentially they are trying to solve a communication problem and the value proposition they propose is secure reliable and other and on the other hand the witch hat is having a very different problem statement they actually say this is actually connecting people how and more and this more turns out to be the keywords actually that's a lot more so what what which hat is a combination of those following apps basically you you chat call and making payment make purchase and also share on the social media so a lot of things basically all together so these two apps have a very different trouble statement actually the promise statement leads to a very drastic difference in the Prada features so let me summarize what's that is such a difference of the school profit statement so here is a simplified version my translation of their common statement the what's happen traveler statement is trying to say we are trying to solve a problem of communication a connection so they are talking about secure reliable and also convenient but if you look at the future of what ZL of which have what they are solving is actually a dirty from the problem they are trying to stop two problems with their canoe solve is consumers lifestyle problem plus the business efficiency problem what this means so in the beachhead the consumer can buy products other taxi can call taxis they know by type products from e-commerce and the making comments in stores that's actually for the convenience of the customers so that's making them actually forget about the wallet so basically in China these days we seldom actually Purina wallet basically a cell phone can do pretty much the payment and many other C's that's a lifestyle problem for the convenience of the of the leading the other problem they are solving is by making those services available which happies actually come in at the merchants to the customers so basically most of the retail stores you know even the Tigers on the street these days many of them they refuse to take cash they want to if they have a barcode they only taken you know the scan as a donation so that's actually maker the business right easily basically basically they do need to take care of this account issues you know return hash and things like that but basically do a scan and go I mean some some company some like Al Ahly pay even just do the to the facial you don't even need a phone so making reddening a business like a restaurant or Red Hill much easier and also by having the people in the platform which had is also helping the merchants to reach out to the customers in terms of professional promotional message of new products and the extractor Accenture so what they are trying to stop essentially is a lifestyle and the business efficiency problems and here this thing both companies are highly capable why is backed by transcend the other is backed by a face book two of the leading technology firms in the world and they are equally capable and also they pretty much have unlimited resources for both of the companies but given this capability because the problem statement are so different I didn't the page several years down the road actually you see that the feature of the two products of trusted people so actually what's app started at first we check started up later so initially they are pretty much the same look at the color you doing the color of thing and then they started they born the same but down the road because the product managers defined is the problems are so differently if you look at these two apps now they are entirely different animals except the color so that's actually tell you another dimension of the importance of the problem statement the problem statement at a higher level is going to decide the direction you are going to work on as a company and this director is going to lead to drastic different futures I'm not trying to say who is right or wrong what I'm just trying to say is what you are saved in the firm statement is going to determine who you are down the road several years I have a company but that's actually making the profit statement really important as the first step of solving a problem so as you can see he's going to relate to the chance you get a good solution he's also going to relate to basically how you are becoming down the road when you saw our solving of problems and then interestingly there are some new developments after we're talking about really like early like 20 2012 20 surgeons based basically on story and then some the road in 2017 what is happening is that somehow was happy is changing their problem statement so what's happened now is the adding the payment features basically back in 2017 they add actually was type of payment and they started it through experimented in the indian market but this potentially they are actually changing their promised a demand for their product and the forward flow which has they started a to define that way early so their payment platform actually launched like three years before to what's HAP and similarly I'm sorry actually uh I'm wrong so actually the yep so actually he sees 2017 what's happening too long to the payment and which had actually started as three years early because they actually defined the problem statement in that way already and on the other side actually was happier to announce their pieces in fact basically our companies can utilize whatsapp as a customer service platform that's back in 2017 but since was that what which had he find their firm statement in that way from the word beginning so they have already launched the platform similar to what's happened three years earlier so as you can see the problem statement is going to lead to very different new future and that this kind of different problem statement colles to delay or early of different service features for really a long lag so the scenes what's happen is is basically a used outside china and what's happened in inside china so basically if there is no barriers of entry you can imagine what's our probably not gonna be there anymore and because these two markets are entirely segmented so what's have a deal there but hydrostatically if they are in the same market we are not going to have have this comparison we are going on without about one one player so that's actually how serious this is okay so I hope you agree with me proper statement is important so now we are going to write up some statement so we're going to talk about what the trauma statement looks like and what the elements should be mimic so here is the description so a proper statement is actually one or two sentences to explain the problem you are trying to address and that's not all all so basically while you are talking about the problem you have to highlight the negative points of the situation and why it matters this is going basically the reason we're half this is trying to say we are not creating a problem to solve that's actually a problem we are having and with these two elements basically you are having of from the statement under the importance of common statement is is cambio de trabajo defined a problem this is also a good framework in which you are going to work around as a communication platform and also a problem formulation platform so this basically this is what the permutation is so this is a put a little bit too abstract way so to summarize is two elements why elements is what's the problem second elements how serious the problem is these are going to define a common statement so that how are we told the writer from the statement so usually writing up from statement is a team effort so the process can be highly recommend to be that you have the people your team who is working on this problem together under each of you potentially writing one seven statement only own the after that subtly independently after that you put up all the statement together and you have a discussion about who has some elements we should put into the final version then you reconcile it into a formal problem statement which all people agree on and this process has a few benefits the first benefit is basically you are vital to all people's intelligence and input into this wise single statement but there is another reason which is even more important than that which is this process of forming as I mentioned what is this process of forming the problem statement is not only just greatest few sentences but this is also a platform for communication basically people write down their idea about a problem and people make a discussion and on and agree on something this is basically a process of communication while we are trying to because I did the debate the other to make a project to be successful you probably have to make sure everyone contributes in their fair share and contribute in their skill the other to have the success of the project and the other to do so if you actually dictate a problem statement what's going to happen is that some people may not actually agree with you and you never know and they may not actually put into effort so I did another day it's going to be a nice suboptimal outcomes but having this process of defining the problem statement together and discuss it and reach to an agreement actually you are trying to sign everyone on board mentally because this is actually some statement we are ugly together so it's natural that is your everyone's responsibility to actually chip in their efforts to make sure you know this a common goal is going to be reached so this is the basically the process of work hard from a statement and as I mentioned a promise statement is not simply to write the problem and the emphasize the importance but is also the process to form a consensus among the teams so now I have been talking too much so there's another few points we'll want to focus on whether you like it Weinstein is focus on existing problems don't create a problem and secondly try to be precise in several ways for example one you are trying to swing the problem for example you have to be very specific about the timeframe of the problem and also try to be specific about the scale of the problem so basically those statement is short but should be precise and quantifiable and also emphasize is important or the bad consequence if it is not that so I have been talking too much so let's look at one example to understand what I'm talking about so so here is a very simple example so we have a hypothetical firm and the former ISM a conglomerate so it has a lot of business division as factors and the one of the division is a division they have seems to have some problems and here is their internal financial statement and you will learn those items in the accounting course later so for now just pretend to believe me those are the numbers P bar here so the number people care about is this Abbott is earning before interest and has so you will learn this later in the accounting course that's a kind of a matter of earning and as we can see there seems to be a problem the problem is over years it seems this number is getting smaller and smaller so it seems there is a decline in earning so here is our question so write a problem statement basically afford him which the company are fine to figure out what's going on why this division has a decline earning in consecutive three year time so remember the elements stated the problem emphasize the importance basically the 19 points and making your statement as precise and as quantifiable as possible so those are the principles we are talking about so I will give you about two minutes you can manually draft a statement that will look has y example I wrote so you can have some minutes to think about it [Applause] [Applause] [Applause] [Music] so remember the elements the problem the importance and the being criticized and quantifiable so those are the principles so anyone want to give give us you are a public statement let's just try to do this exercise so anyone yes then another element is emphasized the importance [Applause] okay thanks for that so any other opinions yes thanks thanks for sharing this promise statement so let's talk about each of those so Thomas have a statement basically precisely to define a frame three years and the problem the scale the problem twenty percent in decline but there is a while element we also have to put basically in this statement we also have to explain why this situation is urgent and important so that's the other elements we should add and the for a sec the problem statement is actually as like as we smuggle the solution into the problem statement so remember one name at the very beginning I'm saying that there are five stars which should follow stamp as that because we have to define step at the tone before we go for the solution and if we randomly throw in some possible channels which potentially causing the problem we are jumping from step one to statue on stack three already and that's not recommended because we will talk about this later in step two discussion because potentially when you can find a practice solution but on the other hands you are running the risk to basically overlook some other potential reasons that's the reason we try to recommend you guys to work on the problem step by step and applying framework this is possibly to be a marketing issue but it may be also possible for some other issues so if we're just to readily pick up one possible cause into the promise statement where I actually messed up about the structure potentially we may actually forgot about something and this problem is very really simple it doesn't have a lot of I imagine why you are really facing a real situation the parameters you are looking at times only like 20 or 30 even more factors are playing around and the worldís smuggle some of those into the problem statement potentially a list from the situation in which wake up computer later and we have truly we have to go back to the first element if we find out that that's not the reason so for example you can realize marketing expenses is not the cause of this problem that will have to go back to that one that's actually become consumed of time and the resources potentially so that's also something what we want to pay attention to and similarly we will have kind of similar issue with your statement so penny those are the things we really want to pay attention to so the other should be precise who consistent with those principle we are talking about in the problem statement so here is one of the things I wrote I'm not trying to read something excellent but I'm just trying to be a faithful believer in those principles and the right statement try to be as consistent as possible to those principles we are talking about about how to write a common statement so here is what I wrote so I started with the same thing as Hamas basically our earning has declined by more than 19 percent in the past two years and the our mission our problem is we needed to identify the cause of the decline and then make an effective plan to quickly turn around of our profitability so that's basically the quicker statement about what's the problem we are facing and the where triangle exercise is quantifiable problem is the 90 percent decline you shouldn't say you know we have decline early you need to specify what's the scale of the decline and also you need to specify the time is happening in the past two years but that's not all for common statement we also need to exercise his significance of the problem-solving we are not solving some problem we are creating so the series here is without i effective action a further decline earning is possible resulting in a very critical financial situation for our company so we are trying to say this is a problem and this problem is important that urgent we have to solve it so this is the basically some hypothetical promise statement I wrote the other to be consistent with those principles we are talking about of course you can read something even more precise or even more emotional or artist as you as you like so just recap is a short statement capture the problem and the capture the significance and is formed by a group of a brainstorm titled intelligence of the team members and also a trip disagreement among the team members to be on board to solve the same common goal so that's basically the problem statement so any questions I will share the two version of the pronoun later after the class okay so if you don't have a problem if you don't have a question if you don't have a question allowed me to move on to step number two so after we find a problem we are in the process of searching of basically the measure so while we are trying to solve a problem in a attain hard driven way we have to quantify a lot of things so potentially we need to define a lot of measures we need to measure what's going on within all these problems and we also need to measure was the business thought and the factors who are affecting those business outcomes and later you will also need to define how to measure the effectiveness of our turnaround plan so basically those measures are going to help us to understand the situation to figure out the solution and also when they implement a plan to measure the effectiveness so those are the measures we need to define upfront before we jump into any actual data collection or dinner calculations and this is also an important step so step number one study the tone step number two basically lay out the roadmap of what we are going to do with this problem so basically this is the hat of the problem and this is basically the poem and the skeleton of the problems before we actually add more stuff on Twitter so here is a page to tell to basically come in so guys it's actually important to actually qualify the measures and basically to assess the process as well as the outcomes that's basically what is the step is about and also the other to do that we encourage people to do a you know structural way so don't just you know pick one or two reason which is most likely we should do this definition of the metric in a most referral way and one of the framework will apply for this particular task to define a comprehensive measures who understand the present process our foodie world right solution or Magrathea plan is actually so called I mean usually we say this is the misty misty framework so that's the way the framework we are going to apply to actually are if a comprehensive set of measures so what these things is about so Missy is basically the essence of message actually has two element 1 element is so called I'm Eve the mutually exclusive the other element is called collectively exhaustive so what is two elements means mutually exclusive basically means you have a lot of calls potentially are causing the problem so so suppose here is your problem and the you potentially have a cause a and the reason B as well reason c2 causing the problem and the mutual exclusive basically saying that what they try to measure is the a or b or c is basically for example in marketing or is the operational expenses or it's actually the human resources actually causing the bad performance of a company we are going to measure each of those and the other to pin down which pattern is affecting this is causing the result what we don't want to do is we don't want to measure the scene in an overlapping manner so for example if we order to figure out a and B and C are better which one factor is actually causing it what we shouldn't do according to the mutual exclusive principle is way different matter and this matter is basically called a B and that this ad major potentially are related to a and related to B that's a by the definition of a metric to figure out the problem because if you are measuring this 8 P and even if you figure out ap measure is actually causing the problem and we still have no idea it's a of P so while we define a measure which should be fine in the way in a more interior way to say we have to define in a clean cut we mark will have a measure which is only related to age or and another matter which is only religion to be so is a clean-cut to see each factor separately this is the idea of a kind of divide and conquer basically why we try to solve a problem you try to split the problem into a smaller problem and I believe those are smaller problems are not affecting each other this is basically called a mutual exclusive in a single words while we define the measure let's define have a clean cut on teeth from the factors instead of a maximum off together because if you mess them up add another day you have no clue what's going on at the end of the day so that's basic maybe a new park for the C part is basically collectively exhaustive it basically means that while you try to figure out the cause of your problems we shouldn't do a random way so we should exhaustively looking for other factors potentially are affecting the business outcome then we should the define metric to correspond to each of those animals so for the same example so we have potentially a and Deana CA are causing our problems so a way to define measure which violate the collective exhaustive is basically say we define measure a corresponds to factor a and weight if I measure B corresponds to be that way even if I anything I'm assuming then this is a violate the crack will exhaustive it's basically saying that that why you cut okay so suppose you have a pipe neutral exclusive basically means you need to have a clean cut and had no or lacking for each of the factors in your business process the collectively exhaustive which basically says that you have covered the whole time and the corrected pieces and put into your plate what you shouldn't do is you take this slice of the pie you tell you this lies the pie and then you forget about the last that accident at the end of the day human you may realize you actually overlooked some factor which can affect your business outcome and there's a likelihood that this is actually the real cost so this is the basically the principle basically we have the pipe have a clean cut and you collect the issue of the pieces together don't forget any piece that's the principle and the principle will help us to define a comprehensive set of measures with a clear isolation but comprehensive enough to cover every corner of the cause of the problem so that's the way how we should define a collection of business metric before we go to transit they happen to the population so that's why I'm saying the fact tube is to actually draw the skeleton of your problem structure so that you can follow this road map to solve the problem step by step and this step is important because this step after this step is going to be some of those most expensive steps to solve the problems so why each other go to map you follow it there's a lot of resources you know financial resources human capital are going in to solving this problem according to the roadmap so if the map is wrong basically we will not sure where we'll be ended up then the consequence will be pretty bad so is that to try to make sure the map is right and the map is complete so you know the whole surroundings of young environments before you try to go through the jungle to solve your problem so that's why is highly recommended we don't put a potential possible cost are into the final earth into the problem statement yes we defined the hat that we define a road map so we're to step back that in the uneasy or Missy way so that we don't have any color to overlooked so that's what we are saying about a approach of problem in a structural way with some framework so there are a lot of framework to a suit which is suitable for different applications and you and basically most of the time in the MBA programs you are learning those free milk from the mapping HR or management and finance and apply into those analysis so here this course is just gave you that place about where those things you learn the framework should be put in to why you are solving the problem in your business so any questions regarding the principle before we go into the exercise [Applause] okay so now let's look at the example so still the same firm they have a problem of declining earning and now after write Hindi sir from a statement where entered the second step of the problem solving so now we are having a meeting and we are trying to define a comprehensive set of measures which potentially can help us to figure out what is causing our problems so let's do this together and I will illustrate to you about how this misty framework is applied in this very simple example so the rest of the slice the rest of the sequential slice are actually the verbal description about what I'm going to show you on the on the screen and the photo slice you can take your own time to look at after the class so remember well say you divide and conquer to have a clean cut but we have a complete the cut so here is what we are going to do so remember we have early the problem is the early decline now we're in floral cut the early can be defined in this way earning is basically can be equals to your revenue basically your sales minus your cost so this can potentially be the first cut of our pipe we pull with having into two slice one slice is the revenue the other slice is basically your cost and we know if the earning is big client it can be roughly driven by two one reason is the revenue is going down or the cost is going up so this is our first car so what we are going to do is we divide into this first step in this way of course there are a lot of other ways you can divide the problem so let's just assume we are going to agree to go in this way so in the in the actual situation you magically go for different a branch or in a situation depends on the terminology and so forth for this case let's just simply say we divide into the revenue and the cost and I'll pull the car we know that there's a lot of different cost so for example we have like a so called cross was sold so this is basically the cost for the raw material you produce our products so for example if we look at if you are looking at a smart phone basically those are the display the the processor and the camera exception and then you also have other costs one big wise like marketing expenses basically the sales and marketing expenses you put up there and let's say we have also other cost and if you like in a situation you may want to divided this the other cost as well but for the sake of time let's assume we are happy to divide in this kind of skill and then for each of the cost going down or sorrowful issue the cost going up potentially will list to the customer and the Potala can make the earnings in stock so this is basically some divided conquer we are looking at that let's assume we are happy with this car so we are happy with the size of the overtime and after that we actually go to investigate what is causing health problems but in many cases depends on the domain conceptually even after we have those item in this way we actually still can logically carton to even further and final friendships depends on the situation so for example is the eland of the situation actually a very common situation in the real life is after we agree we're going to cut up to the sixth time conceptually we still want to make a cut before we can actually figure out what's actually going on so for example hypothetically if we find a revenue is actually decline are we happy with our solution and analysis is that okay for you just for you to tell your manager okay we have a decline early because we find the revenues declined and your manual will say so so which means your divide and conquer is kind of incomplete or it haven't been precise enough so you can actually give some meaningful insight on the recommendation so there are a lot of ways to divide conceptually later one of the way people usually look at it's a very frequently referred way is actually divide and conquer in the following way so you probably asked the following question let me make this I think because the interaction of the of my computer signals so so for suppose you find that revenue is declining usually usually are kind of quite often actually one question we are asking is what is causing the revenue you have to answer this question before your middle manager happy and the in - scenarios are they are potentially two big reasons which can lead to the decline in revenue so one reason is actually affirms the self reason its own reason and the other can be you know some kind of micro reason for example was a self reason so for example if you are in a business sector and if you find out all your competitors are actually having a growth in revenue and you are the only company who is actually have crying revenue that means that is your company's own problem you are not running as well as your competitors so potentially this can be causing by by the financial strategies inflation the operation by the HR many other reasons so this is basically some reason driven by the internal issues of the company this potentially why reason basically a company doing not well because of the already and the other cause for decline in revenue potentially is industry-wide or even economic wide so basically if you find out although I have a decline in revenue but if I'm looking around I find that all my competitors are suffering that very likely that's not my own problems that's actually industry-wide the problem and to know the different cause of this revenue decline problems is very important because that's going to be related to your solution to the problems because hypothetically if you find out is your firm's own problems maybe your prodigy is not competitive maybe you are running at a low efficiency in operation or other stuff if you find out is that reason you're inside your actionable is that is going to be the other do turn it around we have to improve our operation to see which is the area which causing us to be less efficient than our competitors that's going to be recommendation but on the other hand if you figure out is actually in the survive each plan the solution will be different because it doesn't matter how hard you are working to make yourself diner you are in a sinking ship you are basically not going to turn everything around then the implication will be this market is immature or is really over competitive so we have to move on to a new crowd or new technology sectors so as you can see after we conceptually divided the revenue into different classes is going to live to the solution so basically what are the same here is while you are trying to define your metric you are not simply collecting the matter you are actually charged roadmap of solving the problems from the root of your problem to the different causes and the channel to the different branches in vitam compared to the level which you are happy to the extent that why you look at the bottom of the leaf why you say those things your manager will be happy or your customer will be happy so basically the bottom of the leaf will be solution for example here is like a improve efficiency and here is basically new new product so as you can see starting with a problem branch out with different causes and even conceptually different causes to live means actually the solution so that's why I'm saying apply an easy framework to define the standard measure is also the process to draw our roadmap will stop the problem after you don't have done this map what's going on is you are going to create the data and then basically go through the map but actually the past can be earning decline you find out a revenue it decline and now you find out the whole industry's decline that the solution will be potentially moving to the new market so after step 2 there is no new input or new plan you are the total comprehensive map to cover each of the scenarios potentially you will encounter that step 3 to 5 is simply being mechanical to go through the map to find out which branch actually where ended that's why seven number two is very important it's basically we cannot overemphasize the importance of family number two and of course of here for if you if it's a self reason I mean this is the most rough tree which you can be when conquered you can add a lot of videos here and here in the practice this is pretty much too rough if we are looking at a real business application so for example if you while you branch out it is self reason then you can ask yourself the question what can be the cost for example you may have a low efficiency in operation and you may have a like say some patent marketing or your people are not working hard or making other functional reasons thank you can divide and conquer even further fold also each of those basically you are drawing you cut the pipe into small slices until you are happy with that in two reasons why is you are happy that why you why you reach to the bottom you can find the issue of the tart corresponds to an certain recommendation for your business and also the other thing is basically the party is manageable basically is measurable by the number independently so that you can count or some metric to actually do with that so this is the way to apply a missive framework so after your job is true the process of the define a standard measure and the metric is very straightforward what you are going to do is you are just collect the leaves of the trees potentially it will help you to understand what's going on so basically you are going to collect those measures of the financials matter of the revenue and might of the cross now you put it imagine as the list of the measures you will calculate to figure out what's going on with your company so this is basically the process of define a set of metric by applying a Mista framework so as you can see this is not simply to write down some formulas but it is actually a very careful decomposition of your business problems so that you have a road map to follow for the rest of the steps of solving a problem so any questions regarding how to basically define a certain measure by applying the missing footwork so the rest of the slides are pretty much what I was writing on yes you can do this in the meeting and basically a discussion of course you can also too in the way that separately people actually render their own solution that actually we can sell within a team in a meeting that's also doable so one thing I want to yeah that basically that's the way you can you can do it so one thing I want to emphasize is that this kind of divide and conquer this misty our framework to define math majors highly depends on experiences and domain knowledge so while you are looking I say automobile industry versus say retail the way to divide and conquer will be really different yes for different industries the key driving factor are very different so for some kind of a commodity our products the fact are usually more lies in to the cost side the other products are so technical so the card actually determines a lot on the competitive dynamics by if you are in the high-tech product that's going to be something else which are driving the driving the fast so why you divide a compare don't just follow one you know like what we covered here but you need to actually incorporate a lot of your own industries knowledge and norms the other to make a proper divide and conquer yeah internal isn't this one this is like an external reason I wrote like her basically is a company's own problem and micro which means like a English collabo world country level or global economy so basically why have a decline of the some accommodate performance it can be causing by safe global crisis or downturn offered industry many are cyclical so basically those are so called micro so you will have one course called micro economics to talk about those kind of things interest rate for all three employment those kind of issues so the situation which is unclear done so I think that ok the thing is if you divide a car and you write in this way you will be for sure know if this is the reason but your Python is after you figure out that this is reason you are not sure within this which are the three reasons then in if we if this is the case unfortunately you have to basically draw this tree again even in the final grade but the thing is if you do in this this is going to be infinity so the question is so that's why I'm saying why you divide and conquer you stop as where you are happy so how do you define you're happy basically depends on you asked yourself this question so if I went under to this stage and I know I'm going to land on one of the leaves in the tree if I say this to my manager and my manager will be satisfied or not so if they are then you potentially can be happy to start off here and then work on the sadness of the steps the thing is why you are strong your problem you'll reach usually the projects are not going to be you know one shot usually is you started tell you may have a phase one debriefing with your manager your or your clients then according to the feedbacks or discussions you will go into Phase two so essentially you are stopping somewhere which you are happy with the caramel phase but later say two weeks later you report to your manager that you will say you know here is what we find and this is the reason a and this is basically what we are finding and if your manager agree with you and a few this is actually important the conclusion of the meeting will be we will go in look into this even further then that's the stage basically you would divide and conquer this particular factor again this is a potentially a phase 2 project so basically this is how how it go for it yeah but I haven't said that that's going to be the time there are a lot of industry experiences yeah [Music] so when you are talking to your clients you may not you may not need to actually give them this trip basically you can show them simply the branch which you'll find out a problem usually that's how you talk to your clients the value analyze a problem you basically in the background you should go through this yes if you are like working as a consultant usually the client meeting time is really short and the clients usually are not so so patient and actually many of the times they are hostile because you are entered they're basically territory so you have to be really sharp and highlight the problem you're finding with concrete numbers as your evidence and tell them what did you find that's actually a far going to do with the clients what I'm talking about here is what you are working on under the background that's as it goes back to the communication so your only highlight and elaborated those things in the business meeting instead of giving you know how hard I have been working for you I mean that's test that's worth noting in the in the business environment yeah so any other questions okay great so those are the slides which is basically a restatement what I am writing by n-nice too wordy so I basically for your own time to read so now where are you step number three pain attraction so step number one started at home number two so the math number three is basically if I look for the map and a to a treasure hunt and the number three I mean these two stats are the most important types of solving a problem number three unfortunately is the most expensive part to solve all problems here is value if I becomes to data many of the times is really costly is the either cause your neighbor or is actually cut or cause your money most of time actually cost you a lot of money so in this discussion I'm going to talk about the typical data sources and the benefits disadvantage and advantage of the different plaintiff sources and also I'm going to talk a little bit about how this technology potentially change the way we are looking at the tradition of in-house source so first data source can be classified in different ways there are source can be internal external primary or secondary so we would talk about what those things are potentially are where are you looking for it what's the benefits and what's the cost so first internal data this is the data you shouldn't think about the first because the you own it and is pretty much free so what those data's are so those are the data accumulated throughout the daily operations of a company so companies usually are using ERP system and the ERP usually requires the financials for sure and operations and even some other elements of the activities and you have some other digital platforms to handle like a supermarket in customer relationship and other things so those are the data which you should look into the first use that's direct and is free so together schema what you need to do with your organization is to get the authorization or clearest the other to access those data now work with the basically set aside the manage database managers who extracted the data for your analysis so that's basically the simplest way to gather your data and those data is going to be helpful to understand and figure out what's the internal reason for a company who which is not doing well and how you said that not all the data owned by the company usually are in the ERP system there's a lot of cases in which especially in departments such as sales and marketing they may actually maintain the data in other places they may actually keep their customers in-house a instance first and then use some companies they even hit potosi in excel files which means if you need those data to actually buy your product you potentially have to actually first but actually you have to know whether the data is even exist secondly you need to figure out a way to actually get at the data that's the tricky part because they may not even tell you they actually maintained a tight that way so this actually comes into a comments that the order to run a successful consulting or data related project within the organization being only good because scientists is not enough somehow you have to play the role of politicians basically you know make friends with all other parties at least you've got some people have helped you or tell you whether some resources is there with the organization and also figure out a way know the people or you know some other tricks actually be able to gather those data you know food pressure which button to press it with the organization things like that so when you are team leader to handle important projects kind of with a politician quality is actually necessary unfortunately so for those data Woodberry with the organization you need to know whether if there and you need to get away to actually catch them to give you the people you many cases that's difficult especially you have a bad relationship with them that's pretty much apply for every company around the world so those are the things you need to pay attention while you are sourcing for internal data for your analysis after you lose that one and two okay so for external data the light way is easier usually is coming from data vendors from public and from other places especially the external days are coming from data vendors you do need to know they are exist they will make sure you know it they will do a lot of marketing and to tell you we have this data which is I use for a company and don't take a measure they have vendors like say in the news space like apologies Reuters in the marketing side you have like Euromonitor and you have other major Nelson and physically posted major companies to actually sell you the data to run your analysis and inside that we also have public data and we also have a lot of internet data so we will talk about each of those and there are some interesting discussions about each of those actually so first you did have vendors they table under are simply a supplier by instead of supplying you with a hard where the actual is supplying you with information usually the data so for example you are doing peanut one so I give you a date about market shares that's basically collected that's basically the monitor for cell phone cover major brands you all pretty much all the major economies so those are collected by a company called the Euro monitor they basically so listen to those numbers and put them together and the charge customer for food price access those data so this is basically how did her vendor is about and there are a lot of advantages of using they have under data for the first is convenient you don't need to go through this painful process to work with your database manager or no working with your company people who actually hate you you just pay the money that you potentially get you potentially get at the data delivered and if the difficulty is that you can call them and yell at them to make them fix it because now you are the customer and this comes with a second and benefits of the vendor data basically they are professional in handling data so if you have handle credit data usually you don't make sure there's a quality but for them there the data quality is their bread and butter so they are going to have their own so-called QC or quality control teams to make sure that data is actually right so that that quality usually higher and if it is not higher as I said you can either call them and ask them to fix it in a nice way and also they have an the data usually have a better coverage than the internal data or the data your internal research team can come from it so for example the money share data give to you is actually quite comprehensive I hope you agree with me that's a really comprehensive coverage about what's going on in the cell phone market around the globe and for different brands but there are some obvious disadvantage of using the data burner data for the starter is expensive so for example for Euromonitor data if I'm not wrong I think the starting point is like a 10 the turns I think I see one hundred thousand dollars or something so that's the starting substitution speed the other buck got access to a very plain see your monitor Dana and the full final grade data you probably even pay more so basically this is the price tag of getting the vendor they have under data so if you are working for relatively the larger corporate I'm sure your company actually subscribe to a lot of the data for your own field especially like say for marketing or like in intellectual property and a lot of orally we are lost law firms the pinnacles for for law cases so your subscribe to a lot usually that's cause really a lot of for companies look at it usually we're talking about a half million 1 million or million dollars cost to actually get those data usually those are the scale we're looking at and even this is so expensive company I still prefer to use that data because if don't go through is a pain to actually work with people with your organization that's usually the most active you know painful thing you want to you are you know more happy to pay using the shareholders money to get at the data because it's intact so these are the add event disadvantage and the other thing is that for data other data usually is not tailored made for you which means they try to cater to a nice broader customer base as possible so this data may be relevant to you but this may not be entirely fit for your purpose so that's potentially a problem for data banner data is not customized so then follow the by so here are some examples so those are very commonly used for marketing purposes so I seen some of your company may even have solution to those databases for a daily work and the other data type cirno is public they have a lot of NGOs having publicly available for public to use for example oacd is one major supplier for public data at country level it's specifically for OECD countries you can find out the things like income economical growth working hours and houses situation life expectancy so a lot of those demographic and economic data can be freely accessible through ECB and those things are free and in many cases you need those data for example when you are trying to analyze a case or market entry like should I enter this market one of the first step first it has done you potentially look at is those beta from say Oh ECB to understand the economic situation of the cut of the country to see whether that's suitable for your products or services or is too early or too late to actually answer the markets so those data are free and you know you should go for it before you consider more expensive options and the Navigator is internet data so in the night is the go to mind and in many cases you can actually so listen to collect those data for free but of course with some labor work so for example a modem has been a lot of traffic to Amazon is actually not a human is actually machine to crawl on the Amazon Web page to actually cry to the Pradas data so hypothetically if you are a full manufacturer potentially you are going to look at those the Commerce data usually a lot of internet data is unstructured so what struck structured data is basically you have the column and each column is potentially one variable and you have each row each rope financially is my record so those data are easy to handle UT you can use even Excel to make some basic statistics of the data but unfortunately internet data is mostly unstructured so a typical example of unstructured data is actually tax data for example on top of giving the region which is more structured people will read comments about the product so what's featured there like will feature the tomb life and it turns out those a structured data on the Internet are the most valuable part of Internet data for example if I'm not a manufacturer what I can do is I can apply some linguistic analysis like a natural language processing to extract basically what people are talking about about my product for example this is the character C so I Sam Soon but actually what I can do is I mean if I'm working for some song actually I'm working for some service as here with some company if I'm working for their cell phone division what potentially I can do is I grab all these comments from different platforms that I will run analysis basically I will extract a topic for example for each given comments was the since they are talking about are they talking about camera are they talking about this play of batteries and I also know the score for example if I find the person is talking about the display and they gave a really high valuation on the phone this potentially means they are not happy with the displayed so that for the next round if I'm the product manager I would rather to focus on to see how do i improve the user experiences of the display of the cell phones and also you know so a long side of the camera within the same disease or to you may see parting words excellent or other things that you will understand whether they like it or not and also with all those comments I can count how many comments is about this plate how many comments is about the fact factory how many comments is about the operating system that plays on this information I already contender idea about say 50 percent of people are talking about this plate then this means that that's the full factor people are really cure interested in and care about when they make a decision about buying a phone then probably I should put more of my resources of my division work on this feature because that's something people are interesting so as you can see one not actually talking around hexina I can understand what feature customers care the most and also I can understand what feature they like and what features they don't like and there are a lot of other new information I have actually extract from my analysis of this internet data so as you can see there are a lot of ways to use it and that the other classification of data can be primary and can be secondary primary data is basically those data you'll handle clacking for example if you are a marketing person you may actually do surveys you will send out questionnaires and a loop for respondents to understand their opinion about something about their products or you run a focus school to actually invite people to be in a room to actually have at each of the discussions about the products and services and then you can analyze those conversation later so all those are going to form so called primary data the permanent data is something you have attractive or creative on the other hands the secondary data are those you get from others second a source for example most of this vendor they have almost a public data those are basically secondary data because they have you tripped process you use them for your purposes by in many cases may not hundred-percent feet into a business purpose so that's why why you are analyzing a project you should actually work on post so you should have this first-hand data to actually pinpoint your problem by your Sudha as use your other segment data to actually validate what you are looking because for the first primer data first kind of data usually the sample is small so it's may be limited so we need to use a bigger data set to validate it so basically this is a from Modena and the second data and the other comments I want to make the interest about the primary and secondary data is that is used to be the case that the primary data is really difficult to obtain because that's a lot of the labor hours of collecting the data and put them together before you can even run some very simple statistics but now one element is changing as I mentioned in the orientation if technology technology is changing a lot of things even that they have source and the relative worth expensive relative cost to actually get a permit data and the second is data so used to be the case that a lot of karma data is really difficult to get but now technology make it impossible to get at a reasonable cost for example in the retail side if you are running orbitals to work well soon you are really interested in something called a conversion rate so what is the conversion rate in a regional store like in a parent store or you know you know other stores the conversion rate is a ratio in the denominator is how many people actually goes into your store and the numerator is basically how many people actually paid the higher of the ratio the better the store you are ready the slice leader yeah the higher the better sorry the higher the better and you can imagine so hard to actually get this number in the past because okay how many pay is easy to get because you have the so-called POS system the post point of sales basically pal you can see or checkout system you know how many people actually make a purchase but half of him funny how many people under the under the store in the past what you have to do is you to assemble it so say within reminds you to work for three days for example function how many of you actually walk him but that's very costly so now yeah a lot of easy ways to actually do it so one of the way people are doing now is basically say image processing you have the video recording of what is happening and you can use this thing similar to this a class care system to actually count how many objects actually moving for your you know you move into your store that you actually estimate what's the numerator in the ratio now you can easily together of conversion but it's potentially expensive because calculation technology and even before that some retailers already start to use some very simple ways to actually kind of the data so one of the way they are using is this kind of Wi-Fi routers so you know that our cell phone they are not actually quiet so whenever you enter a place our phone without your knowledge there are actually pin or send signals to the other Reuter routers Wi-Fi routers basically that's why while you open your cell phone while you go to the list you see a list of Wi-Fi source available the waiter daiquiri is a send a signal to data transmitter that registered then they know there is actually a Wi-Fi source but by doing that if I'm the retailer I start out with a rotor source what is happening is that my phone actually talking to that Wi-Fi Reuter and what is happening is each firm has a unique code actually so the guy you Nikoli identify each of the phones and these days we know each of us at least have one cell phone so this means that if we count on how many ID for my tea actually peeing our Wi-Fi transmitter we actually roughly know how many people are in other areas so there's a lot of ways through technology to help us to make some of those that difficult to get the numbers much easier these days so this point is that given the technology actually the permit data and the segregated situation are shifting and as I mentioned in the first introduction session as the manager as a good manager what you need to have is you need to have this sense about what is happening around you and how to actually make those to the company's competitiveness so this is actually the responsibility of the managers this is not something you know all to the scope of the manager to know so there are also other examples like a hedge funds financial investors they also use a lot of processing so in the past what is happening is that from for some funds the other to understand how the company is actually operated they actually need to know the sales number by themselves for number one the number accumulate and the one number came out everyone knows it there is no advantage in the financial market for trading anymore second reason sometimes company lies and you actually want to validate whether their number is real or not so use in the past what people do is they stand there junior analyst within the past to somehow hide in front of the door of their factories and account out how many trucks go in out so that they can estimate the sales number of the company does used to be the way so that's very tough to be an analyst at some times and these days the stink-eye it's easier so many hedge funds they are buying this image satellite image data so basically you look at the Google map you know there is a lack of image they basically buy those kind of data in real time of high frequency then they can analyze if there is a subject go out of this factory visit this is one object they can count how many trucks in and out of a factory and that they can also do the same say they can look at an inch import they can come how many ships in and out that they can use is to estimate the economic activities of Korea then they can pattern say Korean Won or cream government bonds or other color other financial instruments to gain advantage before the government's officially announced the economic activity numbers for Korea so basically this is the how the hedge funds now are doing their work so as you can see this is easier so the second the permanent data now is becoming easier and easier empowered by the technology the good news for the junior people are they don't need to do the hard labor anymore to hide in the factory to counter trucks but the bad news is that those companies financial firms they don't need is so many junior anymore that's a twist on storage so this is the summarize our session today so we are covering the first three steps of the problem solving most importantly set of the tone to be step one draw the map step two and the most expensive step to actually sourcing for your data so in the next class we are going to work on calculation and I need if infer some business insight so that's going to be something we cover next class so as I said you don't need to bring a laptop but if you like if you want a feel free to do so I will not yeah so either way we'll do it so that's the safe word to this class so any questions okay that's great I'll see you all next Tuesday that a please be on time for the homework