What are the differences between issue trees and hypothesis trees?

issue tree
New answer on Jun 25, 2021
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Kofi asked on Sep 23, 2019

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Sidi
Expert
replied on Sep 24, 2019
McKinsey Senior EM & BCG Consultant | Interviewer at McK & BCG for 7 years | Coached 300+ candidates secure MBB offers

Hi!

Issue trees are at the heart of the problem-solving approach. What you refer to in your question are two distict types: diagnostic trees (what you call issue tree --> "problem-based") and solution trees (what you call hypothesis tree --> "solution-based").

Generally speaking, an issue tree is a graphical breakdown of your key question. Trees have four basic rules:

  • They consistently answer why or how questions (depending on your key question)
  • They progress from the key question to the analysis as they move to the right
  • Their branches are mutually exclusive and collectively exhaustive (MECE)
  • They use an insightful breakdown

Diagnostic trees are for diagnosing your key question

Diagnostic trees help you search for all the possible causes of a problem. They give you the "WHY?".You list these in logical groups on the first column to the right of your key question, ensuring that your groupings are MECE. As you progress to the right, you drill further down in the details of each grouping.

Solution trees are for actively looking for ways to correct your problem

With solution trees, you look for all the potential solutions to your problem. They give you the "HOW?". As a general rule, you want to know the WHY before you get to the HOW, so if you don’t know the root cause(s) of your problem, find these first by means of a diagnostic tree.

For broader context, issue trees progress further into details until elements are sufficiently explicit. Then come the hypotheses, analyses and data sources. Once you have tested which solutions are viable, you are ready to select one, for instance by using a decision matrix (impact vs. doability).

Example Problem Tree for a household recycling issue:

problem-based issue tree

Example Solution Tree for a household recycling issue:

solution-based issue tree

Hope this helps!

Sidi

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Aws
Expert
replied on Sep 24, 2019
Senior Consultant @ Google | McKinsey, BCG, Bain exp. as Client | 100+ REAL MBB cases

Hi Kofi,

In practical sense, they are similar.

Imagine building a framework for Market Entry where you look at 4 things as part of a Issue Tree:

  1. Market Attractiveness
  2. Competitive Landscape
  3. Economics
  4. Risks

Then you break each one down in more details. You have an issue tree now.

You can also state a hypothesis for your interviewer saying:

My hypothesis is that our client can enter the Japenese Car Manufacturing market, given that

  1. There is a real Market
  2. We can win in this market
  3. The economics are favourable
  4. And the risks are acceptable

Then you basically test each of these 4 hypotheses by asking the interviewer questions around each bucket ot test it.

Does this help?

Best,
Aws

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Charlotte replied on Jun 25, 2021

We might count to the COGS as well factors such as the German Packaging Act (https://www.lizenzero.de/en/blog/german-packaging-act-in-the-uk-obligations-when-shipping-to-germany/) or in general any costs that arise during shipment.

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Sidi

McKinsey Senior EM & BCG Consultant | Interviewer at McK & BCG for 7 years | Coached 300+ candidates secure MBB offers
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