Save time and money by structuring your business solutions
(Part 1 of 2)
Business men and women stand to benefit from thinking like a consultant. Consultants use frameworks and business acumen to solve complex issues that aren’t readily apparent. Fortunately there are simple ways to follow their logic that can save you time and grant you business insights.
First, It is important to understand how a consultant thinks. Second, you should learn how to frame, analyze and communicate a business problem. Third, you need to structure your solutions in the big picture and synthesize your recommendations to align with who you are speaking to.
Understanding how a consultant thinks is rather easy but hard to actually do without practice. First, understand that the process of getting to the right business solution is more important than the actual answer. Consultants often have little time to make a recommendation so they practice frameworks. Consultants also think logically and use data to support and guide their solutions. Finally, after arriving to a solution, they synthesize information for their clients, show how they arrived to their conclusion, and make sure their recommendations are client friendly. For Example, I have pitched advanced analytics without success because my client had no background on statical models. Therefore I structured my solutions in terms that didn’t require my client to dive into data.
Just to reiterate, there are three parts to how a consultant thinks, one, they follow a process and use frameworks, two, they use data to drive their analysis, three, they structure their recommendations based on who they are speaking to.
Now that you have a basic idea how a consultant thinks, its time to learn how to begin solving a business issue. First, verify your understanding of the facts. It is important to get this step correct because you don’t want to be solving the wrong problem. It is important to ask lots of questions and to let people know what your current hypothesis of the problem is. Dig deep into the question and make sure you track your thoughts on paper with a structured chart. Second, Structure your analysis. Match the problem with the appropriate framework. Describe the key components, and track your logic with a chart.
Your analysis should fall into 4 basic types of frameworks, profitability, business issues and situations, mergers and acquisitions, and supply and demand problems/ capacity problems. The profitability framework is the most common and the simplest of the four frameworks. The solutions to profitability problems are usually a change in prices, a change in volume, or an increase in cost. Your framework begins with profits = revenue – expenses. then you break down the pieces until you find the solution. For example revenue will breakdown into (# of units sold) times (price per unit) and costs with breakdown into (# of units) times (cost per unit). Work your way down the different branches of possibilities.
Business issues and situations are often one of the following: Entering a new market, introduction of a new product, responding to competitor behavior, responding to changes in demand, and how should the company grow. If you are not familiar with this framework I recommend doing a google search but basically you need to ask questions about the customer, the product, the company, and the competition. The solution to these problems will be answered by digging into this information.
Part 2 Preview
Solutions and discussion on mergers and acquisition business problems
Solutions and discussion on Supply and Demand Issues
Placing your solutions in the right context