Business problems are often complex, ambiguous, and interconnected. They require you to analyze multiple factors, identify root causes, and evaluate possible solutions. How can you approach such problems in a systematic and effective way? One possible answer is logical reasoning.
Logical reasoning is the process of using rules, principles, and evidence to draw valid conclusions from given premises. It helps you to avoid fallacies, biases, and errors in your thinking. Logical reasoning can be divided into two main types: deductive and inductive.
Deductive reasoning is when you start from general statements or rules and derive specific conclusions from them. For example, if you know that all customers who buy product X are satisfied, and customer A bought product X, you can deduce that customer A is satisfied.
Inductive reasoning is when you start from specific observations or data and infer general patterns or rules from them. For example, if you notice that sales of product X increase every month, you can induce that product X is popular and profitable.
Logical reasoning is the foundation of the toolbox that any consultant or problem solver should use. From Ishikawa diagrams to basic logic tools such as set theory, chain of evidence, these are some of the algorithmic tools that enhance the soft skills that leaders bring to problem solving. The key thing to understand is which tools will deliver the quickest value to solving the problem and will communicate best with your stakeholders. You can have the best logical solution in the world but without understanding it will not be implementable.
Logical reasoning helps in solving both simple and complex problems. It involves systematically analyzing information, framing a clear and concise problem statement, evaluating options, generating hypotheses, and drawing reasonable conclusions.
Logical reasoning can be a powerful tool when it comes to solving business problems. It can help you define the problem accurately, by breaking it down into smaller components. Moreover, it can aid in gathering the right information, by asking pertinent questions and verifying the sources of data. Additionally, you can use deductive or inductive reasoning to generate and test hypotheses. Finally, logical reasoning can be used to communicate and justify your findings and recommendations, with clear arguments and evidence.
In my perspective, logical reasoning is indispensable for solving business problems effectively. It facilitates accurate problem definition by breaking down complex issues into manageable components. Moreover, it aids in gathering pertinent information through insightful questioning and data verification. Employing deductive or inductive reasoning allows for hypothesis generation and testing. Lastly, logical reasoning enables clear communication and justification of findings and recommendations with compelling arguments and evidence. For example, when analyzing market trends, applying logical reasoning helps in identifying key factors influencing consumer behavior and developing data-driven strategies to capitalize on opportunities.
Logical reasoning can be applied to business problems with the help of various tools and techniques. For instance, logic models are diagrams that show the relationships between inputs, outputs, outcomes, and impacts of a program, project, or intervention. They can be used to visualize and test the logic and assumptions behind a problem and its solution. Decision trees are graphical representations of the possible choices and consequences of a decision, helping you to compare and weigh alternatives. SWOT analysis is a framework that aids in identifying strengths, weaknesses, opportunities, and threats of a situation. Root cause analysis helps to find the underlying causes of a problem, while pro-con lists evaluate the advantages and disadvantages of an action. All these techniques can help you to assess your problem and solution.
A couple of useful tools in framing your logical reasoning concerning business problems are Operating Models, BMC and SIPOC. SIPOC is useful for analysing specific processes, BMC puts the processes in perspective within the value chain/s of the business whereas the Digital and Business operating models frame the strategic contexts. For instance taking the example from above if product X is successful but product Y isn't and you are seeking to replicate the success the above tools can frame cause-effect, 5 why's etc. helping you answer your business questions. "why is product Y not as successful as X?", "Can we replicate any meaningful part of how we develop, market etc 'X' to 'Y'?" etc.
Logical reasoning is not a perfect method and there are some challenges and limitations to be aware of and overcome. Cognitive biases, such as confirmation bias, availability bias, or anchoring bias, can distort your perception and judgment of the information and evidence. Additionally, emotional factors like stress, fear, or anger can interfere with your rationality and objectivity. Furthermore, time, resources, or data can limit your access and analysis of the information and evidence. Finally, uncertainty, complexity, or ambiguity can make the problem and solution unclear or unpredictable.
Logical reasoning is a skill that can be developed and honed with practice and feedback. To enhance your logical reasoning abilities, consider reading and studying books and courses on logic, critical thinking, and problem-solving. Practicing and applying logical reasoning to real-life or hypothetical business problems can help sharpen analytical and creative thinking skills. Additionally, seeking different perspectives and opinions can broaden horizons and challenge assumptions. Lastly, reflecting on the reasoning process and outcomes can help identify strengths and weaknesses, as well as learn from mistakes and successes.
Sharpen the saw. There are many tools out there that can help. Books such as Key Management Models provide a solid toolbox for us to pick up. Additionally learn about the common fallacies so that we can identify them. Ask the 6 Ws and use the techniques that are taught in investigation and journalism. Have a passion for mathematics and logic and educate yourself in those areas. Formal debate can help a lot in these scenarios. Lastly understand how each of us has our biases built into us and how they effect our deductions. I can strongly recommend "The Demon Haunted World" by Carl Sagan as a starting point for you journey.