21 September 2011

Thinking Framework 3 - Necessary and Sufficient

I have covered two thinking frameworks in the past. Namely, The Basic Thinking Framework 5W1H and Yin-Yang Thinking Framework – Innovative and Critical.

Here is the third one – Necessary and Sufficient Conditions.

We can have the following 4 combinations:
  1. not necessary and insufficient – need to find out the influencing factors.
  2. necessary and insufficient – the common error committed. e.g. why doesn’t by Quality program brings me more business?
  3. not necessary and sufficient – is this possible?
  4. necessary and sufficient – the best case.
It is important to classify any factor that affect an outcome into a necessary or a sufficient factor.

Herzberg’s  2 Factor Theory
The best illustration is given by Herzberg’s  2 Factor Theory on Job satisfaction. He classified factors into two main group of Hygiene and Motivation. Hygiene factors are those that their absence will cause dissatisfaction but their presence will not result in satisfaction. Motivation factors are those that their absence will cause dissatisfaction and their presence will cause satisfaction (Of course, there are critics that say satisfaction does not lead to motivation).

The factors are:
Hygiene Factors
Leading to Dissatisfaction
Leading to Satisfaction
  • Company policy
  • Supervision
  • Relationship w/Boss
  • Work conditions
  • Salary
  • Relationship w/Peers
  • Achievement
  • Recognition
  • Work itself
  • Responsibility
  • Advancement
  • Growth

The lesson is that some factor are necessary but insufficient.

We also need to know that too much of a factor will result in less motivation according to the law of decreasing marginal returns. But in some cases, the law of increasing marginal returns will kick in such as the more expensive a product is, the greater the increasing demand!

Here is a chart to show the refinement in our thinking. There is a threshold that the factor need to cross in order to becoming motivating.

Multiple Factors - Vector Thinking
We are not restricted to looking at a single factor, such as price, but a combination of factors, forming a vector, as a competitive advantage against our competitor. If I can't compete on price, then I must offer my customer some thing else that he also desire or even more, such as timeliness or greater flexibility or greater reliability etc.  Don't think about just one factor, have a combination of factors to make up a good vector offering.

BBH China MD Christine Ng said that "relationship GuanXi 关系" alone did not work in China anymore (at least among the leading companies that she was working with). She said you need Relationship+, i.e. the capability. In short, you need both, know who and know how, to win business in China.

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