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Issue tree

Graphical breakdown for problem solving

Issue tree

Graphical breakdown for problem solving

An issue tree showing how a company can increase profitability: A profitability tree is an example of an issue tree. It looks at different ways in which a company can increase its profitability. Starting from the key question on the left, it breaks it down between revenues and costs, and break these down into further details.

An issue tree, also called logic tree, is a graphical breakdown of a question that dissects it into its different components vertically and that progresses into details as it reads to the right.

Issue trees are useful in problem solving to identify the root causes of a problem as well as to identify its potential solutions. They also provide a reference point to see how each piece fits into the whole picture of a problem.

Types

According to professor of strategy Arnaud Chevallier, elaborating an approach used at McKinsey & Company, there are two types of issue trees: diagnostic ones and solution ones. Diagnostic trees break down a "why" key question, identifying all the possible root causes for the problem. Solution trees break down a "how" key question, identifying all the possible alternatives to fix the problem.

Rules

Four basic rules can help ensure that issue trees are optimal, according to Chevallier:

  1. Consistently answer a "why" or a "how" question
  2. Progress from the key question to the analysis as it moves to the right
  3. Have branches that are mutually exclusive and collectively exhaustive (MECE)
  4. Use an insightful breakdown

The requirement for issue trees to be collectively exhaustive implies that divergent thinking is a critical skill.

Applications

In management interviews

Issue trees are used to answer questions in case interviews for management consulting positions. A quantitative type of question, the market sizing question, requires the interviewee to estimate the size of a data group such as a specific segment of a population, an amount of objects, a company's revenues, or similar. The candidates are expected to use a structured and logical method of arriving at their answer, and using an issue tree provides a diagram to aid the candidate's logical reasoning. Issue trees are used for other types of case interview questions as well.

References

References

  1. Chevallier, Arnaud. (2016). "Strategic thinking in complex problem solving". [[Oxford University Press]].
  2. (July 2004). "Strategy survival guide: Issue trees". Prime Minister's Strategy Unit.
  3. (August 2007). "The McKinsey approach to problem solving". [[McGraw-Hill]].
  4. (2013). "The Heretic's Guide to Best Practices: the reality of managing complex problems in organisations". iUniverse, Inc..
  5. Chevallier, Arnaud. (2 July 2010a). "Build issue trees: diagnosis trees and solution trees".
  6. Chevallier, Arnaud. (6 July 2010b). "Diverge effectively in your thinking".
  7. Cheng, Victor. (2012). "Case interview secrets: a former McKinsey interviewer reveals how to get multiple job offers in consulting". Innovation Press.
  8. "Market sizing".
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This article was imported from Wikipedia and is available under the Creative Commons Attribution-ShareAlike 4.0 License. Content has been adapted to SurfDoc format. Original contributors can be found on the article history page.

diagrams knowledge-representation management-consulting problem-solving-methods futures-techniques
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