DISAGGREGATION

 

“If I had an hour to solve a problem I’d spend 55 minutes thinking about the problem and 5 minutes thinking about solutions.”

― Albert Einstein

 

Disaggregation is one of my favorite strategy and problem solving tools. I have to admit I thoroughly enjoy disaggregating problems and situations since it often provides the “AHA” moment of clarity. Yet, it is also one of the most difficult tools to master. For the majority of problems, there is no simple framework, template or recipe. It takes practice to look at a problem, properly disaggregate it and prioritize it. Disaggregation can be learned, it just takes a lot of practice and patience.

 

What is Disaggregation?


Disaggregation is the breaking down or separation of something into constituent parts or elements. You can disaggregate just about anything. As it relates to problem solving and strategy development, the most disaggregated elements are:

• Problems & opportunities are typically disaggregated using issue trees and hypotheses trees, which we’ll cover as the next tool.

• Context & situations are often disaggregated using frameworks to separate the different dimensions of the context or situation.

• Processes are disaggregated using process maps and value stream mapping.

• Data & information is disaggregated in analysis, charts, and segmenting the data and information.

• Customers and products are disaggregated into customer and product segments.

Much of the thought process of strategy and problem solving hinges on the correct disaggregation of whatever the focal topic is. Within the problem solving and analytics sections, we will cover the more tools to help you disaggregate.

 

Why is disaggregation important?


The quality of problem solving and strategy depends on strategic leaders being able to logically and properly disaggregate problems, situations, and opportunities. One of the unknown secrets of McKinsey, is how many physicists rank as the best problem solvers within McKinsey because they are experts at abstraction, disaggregation and deduction, having gotten a Ph.D. in abstracting some element of the Universe into all of it’s disaggregated parts and theorizing and deducing how all of those parts interact. At McKinsey, it doesn’t matter that physicists don’t have the business background and experience, because the experience in logic they bring to a problem is often unmatched.

 

How can you develop into a disaggregation master?


First, you don’t have to get a Ph.D. in Physics. If you have one, then you can skip this section, but if you don’t here are some of the best practices to becoming a master at disaggregation:

Master the Tools

We’ve already covered a lot of frameworks, and over the next few sections, we’ll go over more disaggregation tools, including hypothesis trees, process mapping, value stream mapping, fishbone diagrams, charts, segmentation, and analytics.

 

Be Consistent on Level of Specificity

One of the conditions of proper disaggregation is ensuring you are disaggregating elements at the same level of specificity. For example, with the profit tree, costs and revenues are represented at the same level, and then customers and fixed, and variable costs are the next level. As you disaggregate, check to make sure elements are at the right level.

 

Utilize MECE

At McKinsey, MECE was a much-used acronym and concept. MECE stands for Mutually Exclusive, Collectively Exhaustive. It is a fancy term for making sure the components at each level don’t overlap with each other (mutually exclusive), and that the component at each level encompasses the entire universe of causes or opportunities (collectively exhaustive). Once again, think about the profit tree. Costs and revenues are mutually exclusive, in that they don’t overlap. And, costs and revenues are collectively exhaustive, since there aren’t any other elements that make up profit.

 

Understand each Element

Once you disaggregate a problem, then use analysis, facts, and logic to understand each element of the problem. Often, you can use this analysis, facts, and logic to quickly deduct which elements you need to explore more and which ones you can eliminate from further inquiry.

 

EXERCISES TO IMPROVE YOUR DISAGGREGATION SKILLS


To get you going on disaggregation, here are some simple exercises to work on your disaggregating skills.

 

Your Job

Disaggregate your job responsibilities into 4-8 categories that are MECE and are pretty equivalent in importance. Next, break those categories into sub-categories. To take it to the next level, evaluate your performance in each category, think of roadblocks to making each category better, prioritize which categories you want to improve and create a plan to improve them.

 

An Important Process

Pick a process that is vital for you or your team. Break down the process into 4-8 sub-processes that are MECE and pretty equivalent in importance. Next, break those processes into sub-processes.

 

NEXT SECTION: HYPOTHESIS TREE