In order to define the problem, it is useful again to use a valuable framework called the SCQA framework.  This stands for:

  • Situation
  • Complication
  • Question
  • Answer
SCQA - situation, complication, question, answer

The situation and complication are the first steps to assess a problem and figuring out what is happening and to get the framing of the problem correct.  This is also the part where you want to look beyond symptoms and identify the root cause problem. 

SC – Define the problem

Let’s say you are working for a University that is losing money.  You might first define the problem as “The University is Losing Money.”  Once you ask a few questions, you might discover this is not an actual problem, but a symptom of a deeper issue.

A good step when you are new to the consulting process is to write out two columns:

  • The situation
  • The complication
questions for defining a problem by assessing the situation and complication

In the University case, you find that the reason they are losing money is that the state government has passed a new long-term budget that will keep funding at current levels for the next five years and that given your expected rising costs, the University will either have to figure out how to increase revenue from other sources or cut expenses.  The situation and complication could be:

  • Situation: The University has been a successful University and has a growing student body and strong reputation nationally for its Academic excellence
  • Complication: Despite the success of the University, the state is facing budget challenges and is making cuts across the Board.  The University will have to identify a way to close this gap in the next twelve months.

Resulting in a defined problem:

Problem Statement: “While the University has been successful in attracting students and building a national profile, a funding shortfall due to state budgetary reasons means the University has to make decisions to close the budget gap in the next twelve months.”

QA: Asking questions (developing hypotheses)

Once you define the problem, the next thing to do is start developing hypotheses. Put more simply, we start asking questions.

Yes, these are the same hypotheses you learned in your fifth-grade science class that are part of what we call the “scientific method.”  A hypothesis is something that is falsifiable, meaning that through research or analysis it can be disproven. A good example of this would be the hypotheses: “all companies are profitable.” As soon as you encountered one company that was not profitable, you know that your hypothesis was wrong.

Within the context of a business problem, you want to pose a question that you can answer through different means.

Let’s pose a question to address the problem we defined earlier:

Question: Can the University cut costs to cover its budget?

This might lead to sub-questions that are even more specific…

  • Sub-Question 1: Can the university raise tuition for students to meet costs?
  • Sub-Question 2: Are there other government funding options available?
  • Sub-Question 3: Can the university appeal to run a deficit in the next year?

During a typical consulting project, this is only the start. You may begin with high-level questions that enable you to do quick research and refocus the project with a better framing (or even in some cases to adjust your problem definition).

How the consulting process maps to the SCQA principle

As you become more confident that the questions you are asking are the right questions, you would start grouping the questions across MECE themes that might also serve as a good way to divide the work across a team.

For the University team, you might have three separate “workstreams”

  1. Tuition & Revenue
  2. Government & financial
  3. Cost cutting & restructuring

Finding The “Answers”

Once you have the areas of focus and specific questions, that is when the deep research starts. If you were in charge of the tuition and revenue team, you might try to find “answers” via several sources

  • Research on what other schools have done
  • An assessment of enrollment rates vs. past tuition hikes
  • Surveys of current students across comparable universities
  • An analysis of potential third-party financial aid options.

Whatever you find would help inform your “answers.” These are not the ultimate findings, but merely the answers to your hypotheses. If you prove the hypotheses to be true, you can then start to frame the information from that to put together a compelling story to communicate to your audience.

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