This was a talk I gave in IIM Bangalore in March 2012 to Business Analytics professionals on the analytics of consulting. It covers the hypothesis driven approach to problem solving that is the core of solving problems and walks through the entire lifecycle of a management consulting assignment.

1. March, 2012 @ IIMB
Analytics in Consulting
Using the Hypotheses Driven Approach to Solve
Business Problems
Amit Kapoor

2. Context
● Synthesize: Learning to combine, to
condense and bring coherence to ideas
● Discipline: Mastering a major way of
thinking through sustained practice
● Creativity: Process of having original ideas
that have value

3. Content
● Have a dialogue on the analytics in
consulting - hypothesis driven problem
solving
● Leverage a short case study to learn in the
apprentice model
● Discuss heuristics to apply in every day
problem solving

4. Consulting Problem
Ill-Defined and Several Critical
Unique Unknowns
Cross - Functional Business Conflicting
Complexity Problem Stakeholder Views
Too Much or Too Limited Time and
Little Data Resources

5. Consulting Process
1 Defining 2 Generating 3 Testing 4 Making
the Question the Hypotheses the Hypotheses the Case
?
● Write the problem ● Develop the issue tree ● Collect data and ● Develop message
definition ● Generate the conduct analysis and storyboard
● Concretize the hypotheses ● Write and review
scope ● Develop the data
● Synthesize finding and
the output
● Map the issues, and matrix conclusions
deliverable ● Refine hypotheses (as ● Develop
required) recommendations

6. Tablet Case Study - SmartAds
● SmartAds currently is an ad network enabling
advertising for smartphones
● Tablets have emerged as a new device format
with the success of the iPad
● As a smartphone ad company, I should also
be able to serve ads on tablet devices
● What should SmartAds do?

7. 1. Defining the Question
The Strategic Question
● Define the fundamental question the client
wants to be answered
● Focus on the big picture and not the details
● Explore the gap between what the client has
and what the client wants
● Understand how it fits with what else the
client is trying to achieve
Case: What should be SmartAds' Go-to-
Market Plan for Tablets Ads?

8. 1. Defining the Question
Issues and Deliverables
● What issues must you investigate to answer
the fundamental question?
● What is the type of output will be produced
from this investigation?
● What deliverables are expected? Will that
address the client's requirement?
● What time and resources would be required
to accomplish this?

9. 2. Generating the Hypotheses
Develop Issue Tree
Issue 1
Sub Issue 2.1
Hypothesis
2.2.1
Strategic
Issue 2 Sub Issue 2.2
Question
Hypothesis
2.2.2
Sub Issue 2.3
Issue 3

10. 2. Generating the Hypotheses
Issues vs. Hypotheses
What is an Issue? What is a Hypothesis?
● Denotes a major piece ● Phrased as statement to
of the problem prove or disprove
● Pointed to client ● Is an 'hunch' or an
concerns (“So what?”) educated guess
● Limited in number ● Nested under an issue
● Similar in size ● Provides tentative answer
● Will not “fall” to issue question
● Phrased as a question ● Provides context for or
● Amenable to closure guides information
gathering

11. 2. Generating the Hypotheses
Case Study: Issue Tree
Strategic Question Issues
How will the product and services
market look in the tablet advertising
ecosystem in the next 3 -4 years?
What should be
SmartAd's Go-to-
Market strategy for What is the best Way-to-Play for
the Tablet SmartAds in the tablet advertising
Advertising ecosystem?
Ecosystem? How can SmartAds leverage its
capability system developed within the
mobile context for the tablet
ecosystem?

12. 2. Generating the Hypotheses
Case Study: Hypotheses
Issue Sub-Issues Hypotheses
How will the
H1: Market consolidate
How will the tablet around 3 major platforms –
product and ecosystem
iOS, Android, and Win 8
services emerge in the
market look next 3 – 4
years? Which H2: Users will shift content
in the tablet
Platforms? consumption (and hence
advertising
ads) away from PCs to
ecosystem in Which
tablets
the next 3 -4 formats?
years?
... ....

13. 2. Generating the Hypotheses
Types of Hypothesis
Propositional Diagnostic
e.g. market consolidate e.g. users will shift content
around three platforms - consumption (and hence ads)
iOS, Android and Win8 away from PCs to tablets
● If accepted becomes ● If accepted becomes
finding conclusion
● Leaves "so what" ● Answers "so what"
● Simple to test, more ● Simple to interpret if data
complex to interpret fits, more complex to test
● Seeks "predictive" ● Seeks "cause and effect"
data data

14. 2. Generating the Hypotheses
Develop Good Hypothesis
● Connect the Dots - General / specific exp
● Do your Homework - Lit search, web
search, books / journals
● Engage with People - Planning meetings,
clients, colleagues
● Stand on the Shoulder of Giants - Experts,
practice guides, other assignments
● Gather Preliminary Data - Industry
analysis, probing questions
● Think Hard about it!

15. 3. Testing the Hypotheses
Testing the Hypotheses
For Hypothesis 1: Market consolidate around 3
major platforms – iOS, Android, and Win 8
Device Installed
Shipments Base
● Projection '10 -'15 Lifecycle ● Projections '10-'15
● By Device type Estimate ● By Device type
(Smartphone, (Smartphone,
Tablets & PCs) Tablets & PCs)
● By OS (iOS, ● By OS (iOS,
Windows, Android) Windows, Android)

16. 3. Testing the Hypotheses
Building the Data Matrix
● Think on two key dimensions
○ Method of enquiry: Interview/Focus Group,
Research and Surveys, Observations
○ Source of data: Internal, Client, Competition /
Customers, Industry / Government
● Be cost conscious in selection of method of
enquiry
● Assess reliability and conduct triangulation
● Organize and document rigorously

17. 3. Testing the Hypotheses
H1: Device Shipment

18. 3. Testing the Hypotheses
H1: Installed Base

19. 3. Testing the Hypotheses
H1: Installed Base by OS

20. 3. Testing the Hypotheses
H2: Tablet vs PC Usage

21. 3. Testing the Hypotheses
Synthesizing the Facts
Facts 1
Recommendation
1
Finding 1
Fact 2
Recommendation
Conclusion 1 2
Fact 3 Finding 2
Recommendation
Conclusion 2
3
Fact 4 Finding 3
Recommendation
4
Fact 5

22. 3. Testing the Hypotheses
Developing Recommendation
● Generate alternatives, evaluate, screen and
select: Complete the logic tree
● Specify and describe actions, results and
benefits
● Take account of existing conditions, barriers
and resources
● Cover the assignment topics and outputs
● Can be tracked back to address the root
cause findings

23. 4. Making the Case
Structuring the Message
Argument First Action First
What's wrong You must change
Change
What's causing It
Here's what you should do
Change
Here's what you should do This is how
This is how Add the why's

24. 4. Making the Case
Doing the Communication
● Objective: Build relationship, share
information, solve problem, take decision
● Audience: Who, characteristics as individual
/ group, receptivity, expectation, culture
● Purpose: Telling, selling, conferring,
collaborating
● Story: Content, emphasis, style
● Medium: Visual (letter, report, text, video) or
Oral (presentation, meeting, one-to-one)

25. Heuristics for Daily Problem Solving
● Structure your thinking
● Build your fact base
● Develop an initial hypothesis
● Solve the right problem
● Don't boil the ocean
● Produce an output daily
● Synthesize every day (Elevator Speech)
● Focus on the change

26. Contact
● Please access this presentation and speaker
notes (rough) at http://goo.gl/582xB
● If you have any reflections or further
questions, please feel free to reach out to
the speaker at: me@amitkaps.com

27. Backup

28. Consulting Toolkit
Structured Work Structure
Core Oral Written
Problem Solving / and
Methodologies Communication Communication
Analytics Management
Expertise
Content Thought
(Functional / Knowledge Leadership
Industry)
People Relationship Mentoring and Career Mgmt. /
Teamwork
Skills Management Apprenticeship Work-Life Balance
Leadership Collaboration and
Vision and
and Client Trusted Advisor
Influence
Entrepreneurship Knowledge
Development Sharing

29. 1. Defining the Question
The Client
● Who will judge the success of the project?
● Who has the authority to implement the
recommendations?
● Whose views will influence the main
decision- makers?
● Who will pay the bill?
● Who will the team report to?
Case: The CEO and BD team

30. 3. Testing the Hypotheses
Conducting an Interview
● Interview is a process, not an activity
● Preparations is key: objective, selection,
guides
● Conducting the Interview
○ Opening - Establishing rapport, position, orientation
○ Middle - People, Actions, Goals, Outcome
○ End - Summarizing and projecting
● Questions Chain Link: Open - Probe - Probe
- Closed - Mirror
● Listening is paramount

31. Case Study: Issue Tree
Strategic Issues Sub-Issues
Question
How will the tablet ecosystem emerge in the next 3 – 4
years? Which Platforms? Which formats?
How will the product and
services market look in What are the changes in outlook for advertising spend
the tablet advertising and type in the the tablet ecosystem?
ecosystem in the next 3
-4 years?
What should be What are the product and service offering that will be
SmartAd's Go-to- available in the next 3 - 4 years?
Market strategy for
What is the best Way-to- What ways-to-play are likely to be adopted in the
the Tablet
Play for SmartAds in the market?
Advertising
Ecosystem? tablet advertising Which way-to-play would be best suited for SmartAds
ecosystem? to address the tablet ecosystem?
How can SmartAds What are the key capabilities within SmartAds which
leverage its capability create value and enable execution currently?
system developed with
the mobile context for What new or adjacent capabilities will need to be
the tablet ecosystem? developed to address the table ecosystem

32. Case Study: Sub-Issues & Hypotheses
Sub-Issues Hypotheses
How will the tablet ecosystem emerge in the next 3 – H1: Market consolidate around 3 major platforms – Apple Tablets, Google
4 years? Which Platforms? Which formats? Android (including Amazon Tablet), Microsoft Windows 8
H2: Tablets will increasingly dominate content consumption (and ads)
compared to PCs
H3: Current trend of shift in advertising $ will accelerate and online
What are the changes in outlook for advertising spend advertising will increase dramatically
and type in the the tablet ecosystem? H4: Shift to tablet OS platform will result in increase in display advertising
across the world
H5: (Product) Rich media advertising supported by open standards, on both
What are the product and service offering that will be apps and browsers likely to accelerate
available in the next 3 - 4 years? H6: (Service) Display value chain consolidating, maturing and value
shifting towards branding and away from ad networks
What ways-to-play are likely to be adopted in the H7: Five major ways-to-play in the display ad market – integrator,
market? aggregator, distributor, platform enabler and premium/niche
Which way-to-play would be best suited for SmartAds H8: SmartAds would need to shift from a Niche player to an Integrator
to address the tablet ecosystem?
What are the key capabilities within SmartAds which H9: Capabilities set consolidated in five buckets: Assets, Reach, Service
create value and enable execution currently? Offering, Service Delivery, Enablers
What new or adjacent capabilities will need to be H10: SmartAds would need to extend its capability system beyond Ad
developed to address the table ecosystem Network – largely through acquisition

33. Case Study: Analyses and Data
Key Hypotheses Analyses and Data
H1: Market consolidate around 3 major platforms – Apple Tablets,
● Projection of mobile, tablet and pc shipment and parc (2010 – 2015)
Google Android (including Amazon Tablet), Microsoft Windows
8 ● Break up by platform ecosystems (OS, Windows, Android, Others)
H2: Tablets will increasingly dominate content consumption ● Map the possible roadmap for development of different platforms
(and ads) compared to PCs ● Segmentation of the tablet and PC usage
H3: Current trend of shift in advertising $ will accelerate and online ● Projection for advertising spend on mobile vs. other forms (2010 – 2015)
advertising will increase dramatically ● Break up by formats (mobile, tablet and pc)
H4: Shift to tablet OS platform will result in increase in display ● Map tablet usage and impact on ad response and receptivity
advertising across the world ● Map impact on Ad formats with tablet introduction
H5: (Product) Rich media advertising supported by open standards, ● Map impact on likely to evolve on the tablets
on both apps and browsers likely to accelerate ● Requirement level for development: standards,
● Map value chain players, consolidation / acquisitions, key trends and
H6:: (Service) Display value chain consolidating, maturing and value technologies
shifting towards branding and away from ad networks ● Estimate for value chain breakup- Branding vs. Direct Response, Key
Players
H7:: Five major ways-to-play in the display ad market – integrator,
aggregator, distributor, platform enabler and premium/niche
● Segment key players based on (outside in) understanding of way-to-play
H8:: SmartAds would need to shift from a Niche player to an
Integrator
● Smart Ads Interviews (to be done)
H9: Capabilities set consolidated in five buckets: Assets, Reach, ● Map broad set capabilities required in the display ad value chain
Service Offering, Service Delivery, Enablers ● Assess (outside-in) the likely capabilities of sample players
H10: SmartAds would need to extend its capability system beyond ● Smart Ads Interviews (to be done)
Ad Network – largely through acquisition ● Map implication on the revenue and go-to-market