6 Elements of a problem-focused (rather than answer-focused) approach
Investment management continues to be an area of key importance for companies. Where should we invest our limited dollars? How should we measure the performance of those investments? How do we dynamically evaluate and continuously optimize decisions in a way that reserves the right of the organization to “get smarter” as more information is made available?
Project offices are creating ever more intimate relationships with Finance departments, and especially the financial planning & analysis (FP&A) teams, to help ensure that decisions and investments made are in the best interest of the company… and this is a moving target. For many companies, more data and more analysis doesn’t always mean wiser decisions.
In a recent article on CFO.com, writer David McCann cites CEB research that finds that FP&A sometimes goes wrong when it “seeks to provide definitive answers to specific questions.” Taking an answer-focused analysis approach, as is often the case, might be inferior to problem-focused analysis, which “anticipates decisions that will need to be made, illustrates trade-offs, and disrupts conventional wisdom.”
As Johanna Robinson, CEB finance practice leader, explains, “…problem-focused analysis is designed to clarify the question, bring a new lens to it and get people thinking differently.” She prescribes 6 ways to improve decision performance:
- Outline the implications of analysis beyond the near term;
- Draw attention to relevant scenarios;
- Collaborate with business partners on interim analyses;
- Provide a holistic picture of alternatives and uncertainties;
- Help decision makers understand unforeseen tradeoffs; and
- Get the business to think about what could go wrong early.
Project offices are dealing with uncertainty on a routine basis and are oftentimes charged with helping the business make informed and profitable decisions. By taking a problem-focused approach rather than an answer-focused approach, one can help account for the uncertainty that exists in the available options.