Author : Tom Macina Contributors: Scott Bender,Paul Sheng,Mark HoworthbcWorkplanningAnswer-First/March 19981Answer1stB&CCopyright 1998 Bain & Company, Inc. CHI Importance of using Answer-FirstHow to use Answer-First problem solving: MethodologyCreating a workplan: Process overviewExampleKey takeawaysAnswer-First Workplanning Agenda2Answer1stB&CCopyright 1998 Bain & Company, Inc. CHI Answer-First Workplanning Importance of Answer-FirstBains clients demand fact-driven answers to complex business problems in short time framesThere are two fundamental approaches to doing this:Answer-First: 8develop a hypothesis (a probable “answer”) from early factbase and business judgment 8then test the hypothesis with facts and analysisDiagnostic: 8first, collect facts 8then, infer the answer90% of the time, Answer-First is the superior approachmore efficientprovides multiple opportunities to gain client credibilityMost cases should be able to develop Answer-First hypotheses within 1 -2 weeks from start-up3Answer1stB&CCopyright 1998 Bain & Company, Inc. CHI Answer-First Workplanning Problem-Solving TechniquesDiagnostic-First Builds background data and context effectively Can lead to new insights - may identify broader, more strategic issuesDifficult to prioritize or selectively prune analysis without central hypothesis Can create significant yield lossAppropriate 10% of the timeBenefits:Risks:While Bain uses two integrated problem-solving approaches, it is always best to move to a working hypothesis as early in the process as possible.Answer-First Always more efficient Workplan/logic tree translates to storyline and presentationHypothesis can be self-fulfilling, new insights might be missed Difficult to employ where no clear hypothesis and no previous experience existAppropriate 90% of the timevs.4Answer1stB&CCopyright 1998 Bain & Company, Inc. CHI Answer-First Process FlowTypical activities:Develop initial hypothesisLiterature searches on client, industry, competition functional area Analyst reports Industry/topical expert interviews BRAVA Client interviewsLay out and test critical issues identified by hypothesis80/20 calculations Top-down analysis with historically- based assumptions Sample customer calls Analogous industry overviewCreate “bulletproof” answer from refined hypothesisGather and analyze detailed client and external data Review detailed market research Build extensive models Refine assumptions Run sensitivities and scenarios1-3 weeksTypical time frame:2 weeks - 2 monthsRemainder of case100,000 feet10,000 feet1,000 feetA complete assessment of any hypothesis can take time.Answer-First WorkplanningProcess steps:5Answer1stB&CCopyright 1998 Bain & Company, Inc. CHI Answer-First vs. Diagnostic-FirstAnswer-First WorkplanningIn most situations, it should be possible to drive to a hypothesis rapidly.Strategy case“determine our growth strategy,“ “determine our turnaround strategy“ Previous Bain experience with industry Question can be answered using Bain toolkitProcess caseoverhead cost reductionreengineering Implementation case Cases with no previous Bain experienceDiagnostic-FirstAnswer-FirstAnswer-First drives the deliverables and workstreamsUse Diagnostic-First, then move to Answer-First length of diagnostic phase driven by complexity of business problem6Answer1stB&CCopyright 1998 Bain & Company, Inc. CHI Answer-First Workplanning Diagnostic-First vs. Answer-First Problem Solving (Example)You have two weeks before a caseteam meeting at which you are expected to present preliminary results of your analysis Determine the analysis that you will need to present and the projected results it will generate to be included in your presentationOur client, Clothes Barn, operates a retail clothing outlets chain Clothes Barn believes that their chief competitor has the same type of concept, number of outlets, locations, type of stores, and pricing policy (price per type of product)The competitors sales are significantly higher than our clientsSituation:Risks:Why is our client underperforming in sales?Question:Your Challenge:7Answer1stB&CCopyright 1998 Bain & Company, Inc. CHI Answer-First Workplanning Diagnostic-First ApproachIs the concept attractive? Is the mix of products coherent with the concept? Does Clothes Barn target the right customers?Does Clothes Barn have a fair share of voice? How are Clothes Barns promotions perceived? What is the awareness? Does Clothes Barn advertise in the right media?Are stores located in attractive locations:demo- graphics Are stores located in commercially attractive places?Are window displays attractive? Is the shop easily recognized? Do we optimize the product display?Are products always available on the shelf? How does Clothes Barn cover the market needs: what is the width/depth of our