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Presentation Title

ISYS90045 Professional IS Consulting

Professional Analysis

Hypothesis Driven Consulting

Tonight’s Agenda

Professional Analysis

How does the Consultant solve problems?

Hypothesis based problem solving

• Define and understand a hypothesis

• Define and understand hypothesis driven

consulting

How does a Consultant solve problems?

Acknowledgement:

Introduction

 “Afactisasimplestatementthateveryonebelieves.It is

innocent, unless found guilty. A hypothesis is a novel

suggestion thatno onewants tobelieve.It isguiltyuntil

foundeffective.”

 EdwardTeller,NuclearPhysicist

Hypothesis Driven Consulting

A hypothesis is an idea or theory, often based on limited

data, which is typically the beginning of a thread of

further investigation to prove, disprove or improve the

hypothesis through facts and empirical data.

A little bit like detective work

Hypothesis Sample

 “In order to understand whether we should invest in

CompanyA,I would like to check that the Market is

Attractive,the Company isAttractive,the competition is

favorable and we have good opportunities for of exit”

What is a Hypothesis?

A hypothesis-driven consulting approach is:

It’s more than educated guessing; this is how consultants smartly break

down complex or ambiguous problems, and quickly start driving towards an

At its heart is the scientific method – used for hundreds of years by

scientists and thinkers to prove their ideas using evidence. Going as far

back as Aristotle, Bacon, Descartes…

 Also known as “The labyrinth problem”

How do we use a hypothesis?

What does it mean to be hypothesis-driven?

 A hypothesis-driven consultant develops a hypothesis of the answer to a

problem early

 Focuses on testing and revising that hypothesis over the course of the

engagement

 This is also known as having a perspective or Point ofView (POV)

 The hypothesis is used to inform what data needs to be

collected, analyses will be performed,and insights must be gained in

order to arrive at a final answer

 In contrast;

 Operational problems solving has a linear process to it and focusses of root

causes with an outcome determined before it’s implemented

Process for Hypothesis Driven

How do we use a hypothesis?

1. The first step in being hypothesis-driven is to focus on the highest

potential ideas and theories of how to solve a problem or realize an

opportunity.

An example of being hypothesis-driven:

You own a website, and you brainstorm ten ideas to improve web

traffic, but you don’t have the budget to execute all ten ideas.

The first step in being hypothesis-driven is to prioritize the ten

ideas based on how much impact you hypothesize they will create.

Example: Hypothesis process

Hypothesis Driven Consulting

The hypothesis should be considered a living document that

is constantly revised and continuously improved as it is tested and

new information and/or insights come to light.

It is not permanent and it is not the final answer.

It should be informed by background information, preliminary data

analyses, and input from Subject Matter Experts (SME’s)

It is often referred to as cause and effect analysis

Overall Process – Iterations

Hypothesis

Defining a Hypothesis Statement

Wording a hypothesis statement format

We believe that creating {this feature} for {these people} will achieve

{this outcome}.We will validate this when we see {this result} impact

our business in {this way} .

For Example

“We believe that creating Zoom lectures for our students will assist them
with completing their studies in semester 1 2022. We will validate this when

we see that all 98 students can successfully complete ISYS90045 in

Semester 1 2022”

Without a(n) hypothesis

What can happen without a hypothesis?

When clients apply bad logic to many important decisions it can

lead to undesirable outcomes;

• What we see is an idea that pops into their head, and then

somehow it just becomes a fact which occurred when, in a

lousy logic moment a CEO stated

“I’ve never heard our customers

talk about price, so price doesn’t

matter with our products,and I’ve

decided we’re going to raise

prices.”CEO

Examples: Non Hypothesis vs Hypothesis

 Instead of “doing this discount promotion will increase our profits,” a hypothesis-
driven approach is to ask “what are the best marketing ideas to increase our
profits?” and then conducting a marketing experiment to see which ideas increase
profits the most.

 Instead of “our customers need to have this feature,” ask the question, “what
features would our customers value most?”And,then conduct a simple survey
having customers rank order the features based on value to them.

 Instead of “morale is in the toilet because we don’t pay well, so we need to increase
pay,” conduct a survey asking,“what is the level of morale?” what are potential issues
affecting morale?” and what are the best ideas to improve morale?”

Hypothesis Driven Consulting

Limitations:

• Clients initially may be

uncomfortable working this way as

it is different from routine tasks and

operational process problem

• At the start, it may seem as

thought the Consultant doesn’t

know what they’re doing when

they’re asking obvious questions

and gathering data

Hypothesis Driven Consulting

 Should not be based on conjecture or solely on opinion

 Different approach to the linear models of solving problems but it

overcomes bottlenecks in waiting for data to be gathered

 Early, there might not be many concrete facts upon which to base the

hypothesis. But the further you get into a client engagement, the more

facts can be gathered to support or refute your hypothesis

 NOTE: It is definitely not thinking that you know the answer at the

beginning of a client engagement – that attitude creates perceptions that

Consultants are know-it-alls.

 What are some useful tools for gathering information?

Hypothesis Driven Approach

How do we use them?

 In the generic project plan

below, you can see that the

hypothesis development

happens early on.This

typically looks like some best

practices research, interviews

with clients, and lots

of whiteboard time.You put

together some initial ideas

(logical starting points)

For example

Example Hypothesis Approach

Think broadly about the problem

 Consultants have

the time (clients have day-jobs) and the
authority (borrowed influence from their
client executives) to cast a wide net
for answers.

 In the example the client might believe
ABC is the reason for the fall in market
share, but in reality, it is a combination
of other reasons that the client did not
see (or want to admit). Let’s not mistake
correlation with causation.

Validate Hypotheses

You need to validate and prove or

disprove hypotheses.

Don’t just chalk up an idea as fact.

In most cases, you’re going to have

to create a fact base, through logic,

observation, testing,surveys,and

Good Practise for Hypothesis-Driven

 Be sensitive to the fact that most non-consultants are not

comfortable working this way

 Clients may feel you are rushing into a solution without due consideration

 Inform your hypothesis with all available information including

situational context

 Involve others – especially your team – in developing and revising your

hypothesis

 Test and improve your hypothesis constantly as new information

becomes available

Not So Good Practice

Don’t wait until you have every fact you are seeking – you might be

waiting forever and you have timeframes

Don’t waste time trying to make your hypothesis and supporting

analyses perfect

Don’t forget that your hypothesis should be a living document

that is continuously improved

Fail to question your hypothesis

Defend your hypothesis blindly

Adjust data to fit your hypothesis

Some common forms of “hypothesis-driven consulting questions”

? Why do you think that X happens?

? What are some hypotheses you can think of that explain

? What are some possible reasons for XYZ?

For Example:

Why do you think

our staff turnover

is 10%? When it

used to be 2%

What reasons

explain why our

staff unproductively

browse the web?

 Hypothesis based consulting

 Creating a hypothesis

 How would we go about testing our hypothesis?

 The Client and the Hypothesis

 The importance of facts

Slide 1: ISYS90045 Professional IS Consulting Seminar 9 Professional Analysis Hypothesis Driven Consulting
Slide 2: Tonight’s Agenda
Slide 4: Introduction
Slide 5: Hypothesis Driven Consulting
Slide 6: Hypothesis Sample
Slide 7: What is a Hypothesis?
Slide 8: How do we use a hypothesis?
Slide 10: How do we use a hypothesis?
Slide 11: Example: Hypothesis process
Slide 12: Hypothesis Driven Consulting
Slide 13: Overall Process – Iterations
Slide 14: Defining a Hypothesis Statement
Slide 15: Without a(n) hypothesis
Slide 16: Examples: Non Hypothesis vs Hypothesis
Slide 17: Hypothesis Driven Consulting
Slide 18: Hypothesis Driven Consulting
Slide 19: Hypothesis Driven Approach
Slide 20: Example Hypothesis Approach
Slide 21: Validate Hypotheses
Slide 22: Good Practise for Hypothesis-Driven
Slide 23: Not So Good Practice
Slide 24: Examples
Slide 25: Summary

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