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Issue tree

From Wikipedia, the free encyclopedia
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.

Anissue tree,also calledlogic 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.[1]: 47 

Issue trees are useful inproblem solvingto 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.[2]

Types

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According to professor of strategy Arnaud Chevallier, elaborating an approach used atMcKinsey & Company,[3]there are two types of issue trees: diagnostic ones and solution ones.[4]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.[5]

Rules

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Four basic rules can help ensure that issue trees are optimal, according to Chevallier:[4]

  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 thatdivergent thinkingis a critical skill.[6]

Applications

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In management interviews

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Issue trees are used to answer questions in case interviews for management consulting positions.[7]A quantitative type of question, themarket sizingquestion, 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.[8]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.[7]

See also

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References

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  1. ^Chevallier, Arnaud (2016).Strategic thinking in complex problem solving.Oxford; New York:Oxford University Press.doi:10.1093/acprof:oso/9780190463908.001.0001.ISBN9780190463908.OCLC940455195.
  2. ^"Strategy survival guide: Issue trees".interactive.cabinetoffice.gov.uk.London: Prime Minister's Strategy Unit. July 2004. Archived fromthe originalon 2012-02-17.Retrieved2018-10-06.Also available inPDF format.
  3. ^Chevallier's writings (such asChevallier 2010aandChevallier 2016,pp. 243, 265) cite an earlier McKinsey publication that discusses issue maps among other problem-solving techniques:Davis, Ian; Keeling, David; Schreier, Paul; Williams, Ashley (August 2007).The McKinsey approach to problem solving(McKinsey Staff Paper 66). New York:McKinsey & Company.pp. 9–13.Other earlier McKinsey-related publications discuss issue trees too, such as:Rasiel, Ethan M.; Friga, Paul N. (2002).The McKinsey mind: understanding and implementing the problem-solving tools and management techniques of the world's top strategic consulting firm.McKinsey trilogy. Vol. 2. Chicago, IL:McGraw-Hill.pp.11–29.ISBN0071374299.OCLC47092065.
  4. ^abChevallier, Arnaud (2 July 2010a)."Build issue trees: diagnosis trees and solution trees".powerful-problem-solving.Retrieved2018-10-06.See also:Chevallier, Arnaud (14 December 2010)."Be insightful".powerful-problem-solving.Retrieved2018-10-06.
  5. ^See also the how–why diagrams in:Culmsee, Paul; Awati, Kailash (2013) [2011]."Visualising complexity".The Heretic's Guide to Best Practices: the reality of managing complex problems in organisations.Bloomington: iUniverse, Inc. pp.159–167.ISBN9781462058549.OCLC767703320.
  6. ^Chevallier, Arnaud (6 July 2010b)."Diverge effectively in your thinking".powerful-problem-solving.Retrieved2018-10-06.
  7. ^abCheng, Victor (2012)."The issue tree".Case interview secrets: a former McKinsey interviewer reveals how to get multiple job offers in consulting.Seattle, WA: Innovation Press. pp.73–102.ISBN9780984183524.OCLC803397971.
  8. ^"Market sizing".gradinterviewprep.Retrieved2019-07-31.

Further reading

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