Karl works for a large company in a small division that has suffered a failed product launch. As part of restructuring the division, Karl must discover why the product failed. Because he knows both how important and how complex this task is, Karl chooses to use the analysis of competing hypothesis (ACH) tool.
Developed by the CIA in the 1970s, ACH helps intelligence analysts and business executives sort through multiple sources of data, document their analytical process, and then use this documentation to persuade others to accept the solution. As with Karl’s task, business executives face complex, controversial problems every day, and the key stakeholders may offer a variety of theories and competing explanations.
Karl knows ACH will:
- Provide him with a structured technique for keeping an open mind about the causes of issues.
- Help him determine what cognitive biases can hinder solving problems.
- Remind him how falsification—a key part of the scientific method—can assist in solving business problems.
- Help him keep in mind that some facts that seem like evidence are not—and it will help him detect these facts.
- Allow him to create an audit trail for others to test and review his analysis.
- Help him to be rigorous about unquantifiable complex issues.
Using ACH, Karl knows he must first form hypotheses about the failed launch and then examine the data as evidence to disprove his hypotheses. He then creates an ACH matrix using his selected hypotheses and the evidence gathered to populate the chart.
Karl realizes that generating the best answer is an iterative process, so he is not surprised when he refines his evidence and generates new hypotheses. The ACH process will not tell him which hypothesis is correct—but it will help him determine which ones are invalid. It takes some time, but Karl determines the most likely reason behind the failure of the launch is a lack of marketing support to the targeted demographic.
How comfortable are you with generating answers to complex problems that can significantly affect your company? In today’s regulatory climate, senior executives need a concrete framework for arriving at sound decisions and for documenting their analysis. The Accenture Academy course Analyzing Competing Hypotheses for Better Decisions draws on the best of the best thinking of the US Intelligence community to give you that tool.