How to use the What-If Analysis in Decision Making
It’s that time again when you’re thinking about taking your business to another level. Your goals need to take a new direction. You want to make changes to processes or add new products or services. You’re thinking… decisions, decisions, where do I start with all these changes? Well whatever the change is, performing a what-if analysis can definitely come in handy.
What is a What-If Analysis?
A What-If analysis is a brainstorming approach that is intended to visualise potential problems within business processes. However, it is such a useful tool that it can be used in basically any decision making process. The What-If analysis helps decision makers to identify potential opportunities and risks which may arise as a result of a changes within the business. It also helps you to find solutions to problems before they arise.
Performing a What-If Analysis
There are three main steps in performing a What-If analysis.
1. Set up a brainstorming session
Brainstorming is an activity geared at generating creative ideas and problem solving. It requires a safe environment where members feel free to share their ideas and opinions. This can be done through setting simple ground rules which would include allowing everyone to contribute, ideas not being criticised, as well as being considerate of other members. Having clear guidelines in place contributes to the success of a brainstorming session.
2. Determine the topic and develop What-If questions
In this step the group begins to analyse the aspect of business you wish to change. This analysis seeks to identify advantages and disadvantages of the current process/product/service; seeks improvement opportunities in that aspect; then considers any potential roadblocks. This is done by asking a number of What-If questions. Examples of questions would include:
What if we reduced our costs by 10%? Would we be compromising the quality of our service/product? What would we use that savings for?
What if our employees were contractors? How would that impact our business? How would that affect our costs?
What if we outsourced this aspect of the service? How much control would we have over quality? What would our customers think? How would it affect our image?
What if we experience a system failure during our pick time? What backup do we have in place? How would it affect our customers?
Ensure that the What-If questions are in line with and directed at the particular aspect of the business which you wish to change or improve. If done properly, this will encourage the group to begin thinking out of the box.
3. Develop answers to these questions
The next step is to go through the entire list of What-If questions and develop answers to these questions. This will provide a more comprehensive image of the issue being dealt with and provide clarity on whether or not the change you seek to make will be feasible. Take time to evaluate all ideas, assess possible risks and develop plausible recommendations. Some of the questions may require further consultation with individuals who are more knowledgeable or are directly involved in the issue discussed.
The What-If Analysis, if done properly, can be very useful in decision making. As a team, you would have thoroughly thought through possible outcomes and their effects thus placing you in a better position for change.
About Janice George-Pinard
Janice is a Certified Business Coach whose extensive professional experience in various aspects of business has set her on a mission to help business leaders turn their Vision into Reality. She works with them to develop and implement strategies, best-practice systems and take action steps that will help move their business forward. In addition to Business Coaching, she is an Entrepreneur, Certified Life Coach, Trainer, Wife and Mum. She also works with Christian business owners who desire to run their business based on Biblical Principles.