Consulting Value Added Template

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        Wicked problems (aka social messes)
                 have five criteria

1. Not easily quantifiable – no data,
   uncertain data, incomplete data
2. Problem is continually developing and
3. Full of ambiguities, contradictions and
   vicious circles
4. Stakeholder oriented with strong
   political, moral and professional issues
5. Reactive: the problem fights back

   Wicked problems are multi-                 ‘Wicked problems’
   faceted, multi-dimensional                 H. Rittel & M. Webber (1973)
                                              Dilemmas in a General Theory of Planning
 Strategy foresight engages clients and stakeholders
with their complex challenges – aka ‘Wicked Problems’

Wicked problem (Rittel et al 1973)                 Compare Tame Problem
1. Not easily quantifiable as uncertain     1. Has a relatively well-defined and
   or incomplete information                   stable problem statement
2. Continually developing and mutating      2. Has a definite stopping point i.e. we
3. Full of ambiguities, contradictions         know when the solution is reached
   and vicious circles                      3. Binary solutions: objectively
4. Stakeholder oriented with strong            evaluated as being right or wrong
   political, moral & professional issues   4. Has solutions which can be tried and
5. Reactive: the problem fights back           abandoned
        Wicked problems transcends sectors

 What should be our negotiating response based on the various possible
  positions adopted by the other party?

 How should we deal with tax-related private banking challenges?

 How do we pre-empt the risk to corporate reputation in a complex,
  mutating environment?

 What are the core issues that a corporate governance strategy should try
  to incorporate?

 How much should the emerging sciences – synthetic biology, stem cells,
  nanotechnology, pediatric trials – be regulated?
    Morphological analysis is a problem-structuring method
        ideal for tackling wicked problems in multiple
         dimensions using extended typology analysis

    Fritz Zwicky (1898-1974)
      •   Professor of Astronomy, Caltech (1942-68)
      •   Co-founder Aerojet Engineering Corporation

    Developed Morphological Analysis as a
     problem-structuring method to address
     genuine uncertainty and stress test
     boundary conditions, resulting in discovery :

      •   Dark matter (1934)
      •   Triple hypothesis - supernova, neutron stars,
          and cosmic rays (1934)
      •   Gravitational lensing (1937)
  Depicting a 3-D Morphological Field

      Point of origin

Where do you place the 4th, 5th…..nth dimension?
   How to build a
 morphological model

  What to do about the Swedish
  Nuclear Bomb Shelter Program
following collapse of Soviet Union

1. What’s the problem (focus question)?
2. Convene a subject – matter specialist team
3. Stakeholders facilitated to agree
   on most important Dimensions of the problem complex
Quantitative        2 x 2 matrix                 Normative,
  scale                                        non-quant scale

Agree and define a range of ‘values’ or ‘conditions’ for
                   each dimension
A morphological model of 2034 configurations –
    how to reduce to a workable number?
Consider every pair - facilitate team to knock out
   illogical, or empirical, contradictory pairs
                        - or 0 possible
       Cross            x = not possible
Consistency Matrix      S or F = not optimal

                     Note reduction
                         > 90%
Solution space: list of surviving, internally consistent
    combinations – all blue cells are compatible
  Strategy Foresight leaves clients with unique software
 to construct their own scenarios & strategy alternatives

1. Input and outputs interchangeable
   - manipulate both cause and effect
2. Ability to freeze and compare
   scenarios and strategy alternatives
3. Reducing alternatives does not
   require re-developing scenarios
4. Easily updatable - visual, real time
   systematic group exploration
5. Speed, efficiency and cost of
   facilitation and model development
   fraction of traditional consultancies
   – enhances entire value chain
             What’s the outcome?

• Managing genuine uncertainty in real time by placing comparative
  judgements on a sound methodological basis
• Accommodating multiple, alternative perspectives to anticipate
  unintended consequences vs. prescribing single solution
• Anticipating consequences of decisions made under conditions of
  high uncertainty, incomplete data and high decision stakes
   SFP uses multi-methodology to give clarity
  to messy situations and decision-support in
               ranking solutions
                                                Bayesian Belief Networks
                                                                              Assigning a
                                                                              probability to an
                                                                              event to give
Morphological Analysis
                                                                              indication how
                                                                              strongly client
                                                                              believes an event
                                                                              will occur

 Structure (dimensionalise) the
       problem complex
                                                             Analytic Hierarchy Process

               Decision-making process for prioritising
               alternatives when multiple criteria must be
       Analytic Hierarchy Process
 Give a brief description of the methodology
   • Will avoid the mathematics (Eigenvector)!

 Provide examples of where AHP has been used

 Illustrate principle by way of simple example – choosing a car
     Analytic Hierarchy Process is a decision making
    method for prioritising alternatives when multiple
               criteria must be considered

   Developed by Thomas Saaty in the 70’s for
    rational decision support for complex decision
    situations with multiple criteria

   Why? Observed the lack of practical,
    systematic, approach for priority setting and
    decision making by groups when dealing with

   Crucial decision situations, forecasts or resource
    allocations involve too many dimensions for
    humans to synthesize intuitively
  Examples of where AHP has been used

 Investigating the effect of website quality on e-business success

 Assessing supply chain risks for the off-shoring decision by a US
  manufacturing company

 Involving patients in decisions regarding preventive health

 Decision support for selecting exportable nuclear technology

 A departmental approach to apportion co-author responsibility
     People deal with complexity by decomposing the
       problem into hierarchy of common clusters of
             criteria, sub-clusters of criteria etc.

                                    a New Car

  Criteria          Style           Reliability   Fuel Economy

               -   Audi A3      -   Audi A3        -   Audi A3
Alternatives   -   VW Golf      -   VW Golf        -   VW Golf
               -   Megane       -   Megane         -   Megane
               -   Ford Focus   -   Ford Focus     -   Ford Focus
  It is simpler to make comparative judgements
       between two factors using a ratio scale

                      Style        Reliability           Economy
     Style             1:1            1:2                    1:3
  Reliability          2:1            1:1                    4:1
   Economy             1:3            1:4                    1:1

                              Ratio                 Description
Given uncertainty or
incomplete data, relative      1                 Equally preferred
weights are agreed by          3             Moderately preferred
the working group or the       5                 Strongly preferred
managerial team and led
                               7            Very strongly preferred
by a facilitator
                               9          Extremely strongly preferred
As an illustration, ranking the priorities of the
  criteria can be done by a simple method

      Criteria                             Average      PRIORITY
       Style        0.30    0.29   0.06      0.22          2
     Reliability    0.60    0.57   0.75      0.64          1
     Economy        0.10    0.14   0.19      0.14          3
       SUM          3.33    1.75   5.33     100%

               1. Sum ratios in each column
               2. Divide each ratio by the column sum
               3. Compute the row averages
Repeat process with each decision alternatives (Audi,
 Gold, Megane, Focus) with respect to each criteria:

     STYLE      Audi A3   VW Golf   Megane   Ford Focus    Normalised

    Audi A3       1:1       1:4      4:1        1:6           0.12

    VW Golf       4:1       1:1      4:1        1:4           0.25

    Megane        1:4       1:4      1:1        1:5           0.06

   Ford Focus     6:1       4:1      5:1        1:1           0.58

                                                FUEL          Miles per   Normalised
                                              ECONOMY          gallon
                                                Audi A3          45          0.26
Qualitative judgements
                                                VW Golf          50          0.28
and Quantitative measures
                                                Megane           42          0.24
can be incorporated in the
                                              Ford Focus         39          0.22
same decision matrix
          Combine the hierarchy…..

                      a New Car

    Style             Reliability      Fuel Economy
    0.22                0.64                0.14
Audi A3   0.12        Audi A3   0.38    Audi A3   0.26
VW Golf   0.25        VW Golf   0.30    VW Golf   0.28
Megane    0.06        Megane    0.07    Megane    0.24
Focus     0.58        Focus     0.26    Focus     0.22

                 Which car did you choose?
   The correct method requires dedicated
  software and facilitation to calculate the…

 Eigen Vector
   • mathematical function used in prioritising elements of
     different sizes and scale in a matrix

 Consistency ratio
   • a measure how consistent the judgements have been
     relative to large samples of purely random judgements
   • must be less than 10% (dependent upon team expertise
     and quality of facilitation)
                              To recap….

The Facilitated Process                  The Rationale
1.   Deconstruct problem into a           For multi-inclusive modelling
     hierarchy                               • i.e. ‘and’ rather than ‘or’ (use
2.   Make pairwise comparison and              morphological analysis)
     establish priorities of elements     Allows rational group decision
     in the hierarchy                      making where stakeholders use
3.   Synthesise the results (to obtain     experience, data/knowledge to
     the overall ranking of                address uncertainty
     alternatives w.r.t. goal)            Gives decision support to complex,
4.   Evaluate consistency of               mutating problems

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