Analytical tools and techniques you have to know and use
Uncovering what analytical thinking is and learning the steps is one thing, but knowing what analytical tools to use to implement it is a whole new area. I identified a number of frameworks that all help break issues, problems, questions and choices down, following the spirit of analytical thinking. To think and work analytically, you have these tools to choose from.
A great technique to get to the bottom of the problem, to conduct the so-called root analysis. You really just ask why five times to uncover the root of the problem. After you identify the causes, you can design and implement a countermeasure at each level – and this is the real power of 5 whys. Apart from getting to the root problem, this tool is simple and easy to use. It stops you from jumping into action too early, as you need to get to the fifth why and the root cause before identifying countermeasures. This analytical tool has its limitations though – it’s as good as your knowledge of the problem, and even with as many as five whys, you may not be able to dive deep enough to identify the real root of the problem.
One of the most popular analytical tools, a fishbone diagram helps you split out various causes that lead to the problematic effect in an organised way that categorises the causes. It is sometimes referred to as a cause and effect diagram, an Ishikawa diagram, Herringbone diagram or Fishikawa diagram. It is a very visual tool, as it provides a structure to group the causes of a problem and display them in one place. You also start by defining the problem first, but then you identify the key areas that contribute to the problem. Then you look at each area individually to find underlying causes. While brilliant among analytical tools, the fishbone diagram will be limited by your knowledge in the given areas, and you may not even realise there are some specific areas that contribute to the problem.
Probably the best tool to break down a problem, identify issues and formulate hypothesis to solve the sub-issues, before resolving the main problem. You identify the problem statement first, and then break it down into sub-issues of the problem, and then another level of sub-issues of sub-issues. Then you define hypotheses as to how to solve sub-issues first, and you trace how solving sub-issues will in turn lead to the solution of the main problem. The biggest advantage of using the issue tree is the fact that you actually generate some hypotheses around potential solutions – not just identify the issues. The drawback? If you don’t verify the hypotheses in your issue tree, you may start solving wrong issues…
Cost benefit analysis
When faced with choices, cost benefit analysis comes in incredibly handy in analytical thinking: analyse options and choose the best. Start by defining the choice statement and identifying the options you have. Then, define the types of costs and benefits that are associated with this particular choice. Next, for every option you have, determine (quantitatively or qualitatively) its costs and benefits. Compare the costs and benefits for each option to obtain the net benefit for each, and choose the one that provides the highest benefit. Simple! Of course one of the limitations of this technique is the fact that it may be difficult to determine costs and benefits, especially if you’re looking for quantitative measures. But on the upside, cost benefit analysis gives you a very structured way of choosing that goes down to the detail.
Benchmarking allows you to compare various alternatives against the best case scenario in specific categories that matter – ideal tool for analytical decisions. Start by identifying the categories you’ll use to assess the options against (they can have different weights attached), and decide on a scale, say from 1 to 10. Think about the best case scenario that would get 10s all way round. You can even write this ideal solution down. Then, look at your alternatives and score them from 1 to 10 in all categories. Next, add up the points for each alternative. The one that scores the closest to your ideal scenario is the one you should go for. The big advantage of benchmarking is the fact that you have to brainstorm categories that matter – this in itself helps you structure the choice as you break it down into constituents. However, it may be hard to actually score the options on a specific scale.
A relations diagram is a great way to organise issues that make up a problem. You get a fuller picture of the problem with an emphasis on the relations between issues, so you can prioritise solving these with the biggest leverage. Start by identifying the main problem, and then brainstorm various contributing issues. As you identify the issues, draw arrows that indicate which issues contribute to other issues, and consequently – to the main problem. The arrows should be drawn from the influencing issue to the influenced issue. Next, count the arrows. The issues with the most outgoing arrows have the biggest leverage on the problem. With a relations diagram, you gain a better understanding of the importance of each issue with respect to the problem, which is not the case with other analytical tools. However, you may not be able to identify all relations correctly, so it’s important to verify your relations diagram.
Do you have any experience using these tools? What have they helped you with?If you’d like to learn more, subscribe to Lessons in Thinkfulness and receive free, weekly lessons designed to help you become more thinkful at work, in business and in life.