Archive for March, 2012

Visual thinking

March 30, 2012 Leave a comment

It is widely understood that data analysis is an extremely broad term. The first thing that comes to my mind when I hear these two words is number crunching in Excel. In fact, I find it hard to think about anything else – macro’s, calculations aghhh! But there are a countless number of data analysis techniques. And what we can be sure of, is that the amount of data we have to deal with in this increasingly connected world can sometimes feel overwhelming.

So, what are the best ways to deal with a problem. There is no doubt that with the proliferation of data, businesses are having to utilise more effective ways to deal with this information effectively.

“The formulation of the problem is often more essential than the solution”

– Einstein

Analysis must be conducted carefully. Before diving into detail, we must be sure of what we are conducting it for. As Dr Tony Wagner quite aptly stated “we often answer questions that haven’t been adequately explored, and we try to develop solutions for problems that people don’t yet understand.”

Through my experience, working with visuals is one of the most effective ways to look at issues from different perspectives. This method may not suit everyone, but I know that I learn best with imagery, and it helps me make sense of a situation. The most well-known form of visual technique for data analysis is likely to be a mind map, where a diagram is drawn which links ideas, tasks, and information to a central word, phrase or idea. This is a widely used technique, however, the visual approach to tackling problems encompasses many more techniques.

Visual thinking

In a previous role of mine I was introduced to the term visual thinking. Dave Gray, the founder and chairman of consultancy XPLANE, uses visual thinking tools to guide clients from complexity of clarity on various topics. The term itself embodies the concept wholly. Visual thinking tools employ pictures, sketches and diagrams, to represent points across the thought process, and the methodology is becoming more widely used at a senior level to tackle a wide variety of every day business issues.

The XPLANE team typically uses a considerable amount of Post-it™ notes and coloured markers, taking clients on visual journeys through current issues they are faced with. These issues can range from distribution strategy analysis to assessing a new market entry.

Visual thinking is used in a way to construct and discuss meaning, and deconstruct and rebuild challenging business issues. As Osterwalder & Pigneur state in their book, Business Model Generation, these visual tools give ‘life’ to a business issue and enable participants to asses complex issues from an alternative point of view.

The XPLANE team states that visualisation at a management level makes information more tangible. The business benefits of making information and data clearer improves decision making by providing more accurate understanding of business issues.

Visual thinking techniques are extremely valuable to businesses and can uncover key insights, which can ultimately improve any business’s performance. They also add a little bit of fun to business, and that can’t be bad.

Is business-morale a monetary-measure?

March 22, 2012 Leave a comment

In the years of 2005 and 2006 scandals ran through German media that would eventually change the perception of business ethics. Back then, the workers’ council of Volkswagen got caught for organising pleasure trips to Brazil on the company’s expenses. Furthermore, Siemens has been sued for systematic bribery and finally got charged a fine of about 201 million €. Thereupon business seems to have changed all of a sudden. Established habits turned into immoral offences.

The government dealt with the issue in January 2007 and passed a law that limits the value of corporate gifts to 35€. I’m now asking myself: Is that the border between an ethically passable gift in a business relation and the moral abyss?

Let’s face it from a different perspective. What are the most common gifts to give to a business-partner for christmas? I’d say those are a couple of bottles of wine, a bottle of champagne or a calendar for the upcoming year. Isn’t it fairly easy to exceed the limitation of 35€ with such gifts that simply express your appraisal of the successful business relation? Or even: Might your counterpart interpret a cheap, but ‘legal’ bottle of champagne as your minor interest in the continuation of the connection?

I admit that it is difficult to measure the border between a sign of appreciation and bribery. Especially, because those borders are defined by every individual himself. Nevertheless, I’d grant mature managers and public figures the competence to handle this topic responsibly.

Thus far, we have only measured the level of morale against the amount of money, we perceive to be non-bribe-worthy. But isn’t morale more than that? On Wikipedia it says: Morale is “the capacity of people to maintain belief in an institution or a goal, or even in oneself and others.” So, it is more than that, by saying it’s the belief in an institution…

To me it seems that nowadays, people are measuring good business managers by morality, for which they have set an extremly high standard. A standard that is pretty blurry and fluent and only based on money…

Does that mean that business-morale is just a monetary value?

Whose perceptions of good morality does that meet?

And how is that compatible with the high standards we set for responsible people in powerful positions?


Give it structure

March 15, 2012 Leave a comment

Alex recently provided some information to assist in case-interview preparation. When dealing with the myriad of details included in these interviews, you can quickly become overwhelmed with the sheer complexity and amount of data being provided. The only way to manage this effectively is to use structure.

This is where the framework comes in. Utilising frameworks effectively is not only an essential skill for completing case-interviews, but is a critical weapon to be used in your future career, whatever industry you choose to enter. They can help uncover key issues, find potential solutions to problems, and also help you present research and information in an easily understandable way.

The most important thing to remember is that using frameworks will not neccessarily answer the question at hand. They are simply tools to allow an issue to be structured, and require additional acumen and knowledge to assist in discovering the key insights you are really looking for.

Some useful frameworks

Porters 5 Forces

One of the most widely recognised and in-depth frameworks I have come across is Porters 5 forces. This model was developed to gain an insight into how profitable an industry (and consequently firm) could be based on analysing the industry’s structure. This model is complex, but by gaining an understanding of how each of these different components interact, it can assist in improving your understanding of business at a macro level, and how different factors influence each other.

porters 5 forces


Profitability Analysis

Whenever you are faced with a financial issue; maybe sales have fallen, profits have dropped, variable costs have jumped 20% in the last year etc., it is best to start with the profitability framework. The application of frameworks requires basic business financial knowledge and a logical thought process.

Simply put, you draw the diagram below which shows that profitability = revenue – costs. You then work methodically analysing one branch at a time, from one side to the other, building a synthesis as you go. For example, I may discover sales over the last 5 years have fallen year on year. I may then want to ask for further information to identify whether or not this is an industry wide issue. If not, it may be a driver of the current problems the company is facing.

One of the key points to mention here, is that you must segment your numbers. Your revenues may be decreasing annually by 10%, but how are our competitors doing? And how does our position relate to the industry?

profitability framework


Three C’s

This is a very broad framework developed by Kenichi Ohmae, a Japanese strategy guru. He said that a company should focus on three key factors to ensure success:

  • Customers
  • Competitors
  • the Company itself
This framework is useful when you’re not too sure where to start. By using these headings to structure the information you have been presented with, you can begin to delve into the factors driving the situation at hand. You may also add additional dimensions as you see fit. The order you progress through the headings really depends on the problem you are faced with, i.e. if it is a market entry problem then you may want to know what sort of customer segments is the company intending to target, are they similar to our existing customers, and so on.

Some assembly required

The simple problem with frameworks, is that there is too many of them.  The most helpful resource I have found on this subject is Victor Cheng’s I completely agree with this ex-McKinsey’s ‘simplicity is key’ approach, and I suggest you look into his resources and subscribe to his newsletter to access a wealth of information.

One important point he emphasises, is that you cannot rely on frameworks completely.  Frameworks are not there to do the work for you. You must adapt them to the situation at hand and be creative in how you apply them. I found this quote quite useful:


“I personally found that I got better at solving cases very creatively (deviating from standard frameworks) the more I mastered the main frameworks. I was better able to see which parts of a case situation fit a pre-existing framework and which did not. Often I would combine frameworks – such as starting with a profit and loss framework, realizing there are broader business issues at play to understand why say unit sales are down… and switch to a business situation framework midstream.” – Victor Cheng

Baby Techs with Muscle

The world changes rapidly. A few years ago online newspapers and tablet computers were not a big deal, today they are nearly as important as breathing. But technological progress does not stop here, it keeps moving, quickly and  unrelentlessly, pushing forward to new and fascinating destinations. Here are my five favorite baby techs that could have a world changing impact:

1) Raspberry Pi
Status: Small scale industrial production (10,000+ units)
‘Raspberry Pi’ is a $25/$35 programmable computer. The vision that drove this product is allowing kids to learn real programming on their own (not just making of web pages as most kids may try now) and at a reasonable price. The result is ‘Raspberry Pi’ a small computer, capable of quite some muscle. The $35-version has an ethernet port, HDMI Video, RCA Video, USB 2.0. It runs at 700Mhz and has 256MB memory. Sure these stats are not as impressive if we consider that most of our phones run 800Mhz+ (for example Apple A5), but at $35 Raspberry certainly looks like a yummy hobby.

2) MakerBot Industries
Status: Medium Scale Production (>100 Units)
MakerBot is an affordable 3D printer. Well it still costs $1,200 and the more advanced 2 color model is $1,700, but this is well below the tens of thousands of dollars industrial 3D printers cost. What can it make? Well almost anything. It uses a plastic filament that is heated up and moulded into your 3D design. The result is a plastic figure the size of a large coffee mug. These guys also run a website called Thingiverse, where users can share their 3D designs.

3) Numenta
Status: Limited Scale Application
Numenta is a company started by Jeff Hawkins and Donna Dubinsky. It aims to develop machine intelligence. But wait! It is AI; but this term has been sooo overused that it lost all of its meaning. We are not talking about evil or friendly robots, nor we are talking about self-aware machines, instead we are talking about computer programs that can do human tasks, lets say hmmm… distinguish between a cat and a dog in a picture? This task takes a human less than a second to do perfectly, but for current computers it may take hours and they might not succeed at all. Is it because they are not fast enough? No, Jeff Hawkins, argues that it is because we are not using the right approach. Current AI uses calculation as means of achieving its objective. Humans  however, don’t calculate, they predict and approximate, and this is what Numenta is trying to create with the help of Temporal Hierarchical Memory. More can be read in Jeff’s book On Intelligence.

4) Focus Fusion – Lawrenceville Plasma Physics
Status: Experimental
Fusion is the process of combining atoms under tremendous heat and pressure forcing them to fuse. Some of the matter in the process is converted strait into a large amount of energy. In contrast, atomic bomb works by splitting large atoms (namely Uranium) into less massive atoms, releasing a bit (compared to fusion) of the energy. Humans are already doing quite well in terms of nuclear fission. We have many nuclear power plants around the world, but they are problematic due to the production of nuclear waste and radiation. Fusion can be the answer, since this reaction produces more energy, no waste, and only tiny bits of radiation. The hindrance to developing this approach is in the fact that you need to heat up your material to millions of degrees and once it becomes plasma, there really is no way to keep this super hot material contained and still hot (magnetic fields can keep material contained in all but one direction). The beauty of Lawrenceville Plasma Physics is that they exploit plasma instabilities, instead of trying to contain them. As such, their machine costs $150,000 – $300,000 to make, instead of millions required for a tokamak reactor. Why Focus Fusion approach is not developed more and millions are pumped into tokamak? Beats me!

5) New Organ Mprize
Status: Theoretical
Methuselah Foundation aims to advance medical technology and eliminate or even reverse age related degeneration. It does so by creating prizes awarded for milestone achievements in medical technology. One of such prizes is the New Organ Mprize awarded to a team of researchers who can either store an organ for 30 days or create a synthetic organ from persons cells. Since reprogramming adult cells into stem cells and creating a particular kind of tissue is quite easy nowadays, the next step would be creating a whole organ with multiple types of tissue and blood vessels interconnected. This is what Mprize hopes to achieve. Is it possible? Certainly! The real question is “How soon?”

Categories: Alex, Healthcare, Innovation

6 steps on how to admit failure

“I have not failed, I’ve just found ten thousand ways that won’t work.”
(Thomas Edison)

Failing to achieve previously set goals is an incidence everyone of us will be faced with eventually. And even though it might make us feel embarrassed or upset for not hitting that target, denial of failure forecloses the chance to identify the source of malfunction and eliminating it.

However, it might still be hard to admit failure and/or take the blame, since commiting oneself to the consequences on a personal level seems to be the bigger negative than the positive impact of prospective error avoidance to the team or the company.

Does that mean that the admittance of failure should be incentivized? I don’t think so, on one hand, because it contains the risk that people will become too casual in dealing with failure and might as a result, increase the failure-rate. On the other hand I think that employees should be encourage to commit to their actions and demerits, and provide them with the tools to learn from shortcomings and help to avoid repetitive occurrences.

I recently came across the article ‘Why I hire people who fail’. The author of this post implemented a system in his company called “Failure Wall” that encouraged his employees to publicly admit to their failures. At the end of his article he wrote about the management-hiring-process and even affirmed that “It’s a red flag to me if a candidate can’t admit a mistake with a bit of self-deprecating humor.”

Thus, I created a 6-step-plan to admit failure and their use for future success:

  1. Reflect carefully on what went wrong
  2. Self-critically find the source of failure
  3. Think about how you could have avoided it
  4. Deduce the lessons that you have learned from the mistake
    (several methods are possible to use during this step, one might be 5S)
  5. Share your experience with others
    (privately, in your working environment or even publicly on platforms like
  6. Openly discuss it

Today’s post is inspired by a TED-talk titled ‘What happens when an NGO admits failure’.