Image demonstrating complexity in charity sector issues
STRUCTURED PROBLEM SOLVING BRINGS CLARITY TO POTENTIAL SOLUTIONS
We are all working in complexity, managing multiple internal and external factors, with finite resources. We could argue that this is especially true in the charity sector given the norm of managing with limited funding. In this context, solving problems (the raison d’etre of the entire sector) requires a structured process of analysis, facilitation and presentation.
A charity is running a deficit budget and needs to return to surplus as soon as possible.
The problem might be defined as ‘we need more income growth’.
But this is jumping ahead to a solution too quickly.
There could be a number of reasons for the problem and there are a number of potential solutions that could be considered to achieve a surplus budget. In strategic consulting, it is important that we are solving the right problem, or the root cause rather than merely a symptom; and that we are considering potential solutions based on robust information and analysis. Charities with finite resources also need to be able to prioritise when there are multiple options available (which there always are).
There will be data, both internal and external, that can be analysed to explore the problem further. There will also be intangible information that stakeholders can provide to give context to the data.
Whereas in previous decades information gaps have been a challenge, it is now more likely that there is a surplus of information. It is important to give structure to an issue so that you can decide what information is most important and, with finite resources, which issues to explore further and which options to prioritise.
Today, both information and options are abundant. This can be a blessing and a curse, sometimes leading to analysis paralysis.
One way of initially breaking down the issue is to use an analysis from McKinsey called:
MECE (Mutually Exclusive Collectively Exhaustive)
A benefit to this is to structure complex issues into simpler sub-issues, which can be investigated further or de-prioritised. MECE means that these sub-issues do not overlap (to avoid confusion) and they cover all possible issues (to avoid missing something important), as shown in the image below.
Once the various reasons for the deficit have been identified, we can explore these in more detail using objective research and analysis. This enables us to identify a more accurate problem statement. For example:
‘The charity is struggling to return to a surplus budget due to increasing staff and overhead costs driven by regulatory change and inflation; while the charity does not have a clear strategy to increase its income in line with the increased expenditure.’
Identifying, analysing and presenting potential solutions
Once we have a more clearly defined problem, we are in a much better position to explore potential solutions.
In this simplistic example, there are two routes to achieving a surplus:
We then need to explore how we could increase income or reduce expenditure. By facilitating workshops with key staff, it is likely that we can generate lots of potential ideas – just a few are illustrated in the issue tree shown.
Further research and analysis can then be undertaken to evaluate the pros and cons of each idea, including cost-benefit analysis for example.
Following a structured process like this enables us to then present potential solutions as options that can be considered by the charity’s decision-makers, in the knowledge that they are based on sound research and analysis.
Where there are multiple options that could be implemented, these can be prioritised. Usually, a charity doesn’t have the money or the staff time required to implement every good idea all at once, so a clear analysis means they can invest in the highest impact idea first, often alongside some of the low-cost, easy to implement ‘quick wins’.
How does your charity identify problems, generate ideas and make decisions?
Share your experience, thoughts or questions with me on Twitter or LinkedIn, I’d love to hear from you.
Do you have a problem you need help with?
As a strategic consultant focussed on helping charities to maximise their impact, I love to explore complex problems and potential solutions, so that your charity can make well informed decisions.
If you would like to have an initial discussion with me on a problem your charity is facing, please get in touch at firstname.lastname@example.org.
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