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.

An issue tree, also called logic 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 in problem solving to 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

According to professor of strategy Arnaud Chevallier, elaborating an approach used at McKinsey & 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

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 that divergent thinking is a critical skill.[6]

Applications

In management interviews

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

References

  1. ↑ Chevallier, Arnaud (2016). Strategic thinking in complex problem solving. Oxford; New York: Oxford University Press. doi:10.1093/acprof:oso/9780190463908.001.0001. ISBN 9780190463908. OCLC 940455195.
  2. ↑ "Strategy survival guide: Issue trees". interactive.cabinetoffice.gov.uk. London: Prime Minister's Strategy Unit. July 2004. Archived from the original on 2012-02-17. Retrieved 2018-10-06. Also available in PDF format.
  3. ↑ Chevallier's writings (such as Chevallier 2010a and Chevallier 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. ISBN 0071374299. OCLC 47092065.
  4. 1 2 Chevallier, Arnaud (2 July 2010a). "Build issue trees: diagnosis trees and solution trees". powerful-problem-solving.com. Retrieved 2018-10-06. See also: Chevallier, Arnaud (14 December 2010). "Be insightful". powerful-problem-solving.com. Retrieved 2018-10-06.
  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. ISBN 9781462058549. OCLC 767703320.
  6. ↑ Chevallier, Arnaud (6 July 2010b). "Diverge effectively in your thinking". powerful-problem-solving.com. Retrieved 2018-10-06.
  7. 1 2 Cheng, 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. ISBN 9780984183524. OCLC 803397971.
  8. ↑ "Market sizing". gradinterviewprep.com. Retrieved 2019-07-31.

Further reading

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