A Simple System to Identify Risks Used by Strategy Consultants

The right questions + structure = success

Imagine you are a leader at McDonald's. You are considering offering order customizations to your customers.

What risks do you have to consider?

Normally, people tackle this by brainstorming some ideas in an unstructured manner.

For example, you might say:

  • Orders may take longer

  • Our staff has to do more work

While you certainly come up with some important points, you risk overseeing others.

Instead, break down and structure the question into smaller questions.

It’s like going on a treasure hunt with a map. You’ll find it faster.

First, you think about the different groups of people who will be affected.

Second, you think about how they will be affected.

Let’s take up the McDonald's example.

Question 1: Who is affected?

  1. Customers

  2. The restaurant staff

Question 2: What are the consequences of order customization?

  • More complex orders

  • More challenging inventory management

Question 3: How are the different people impacted by the what?

Here, you create a simple matrix to see the effects:

For example, more complex orders will lead to our customers experiencing the following:

  • Longer wait times

  • More mistakes in the orders

  • More crowded stores

The more challenging inventory management will lead to our customers being unable to order what they want because of missing items.

The orders will impact the staff in 2 ways:

  • It will be more difficult to fulfill the orders

  • They will experience more time pressure and stress

The complexity of the inventory will cause:

  • More conflict resolution e.g., when people complain

  • More effort for quality control because of increased items and vendors

  • More effort for inventory management overall

Key Takeaways

Approaching this simple question with a system will give you more things to consider than you otherwise wouldn’t. 

This is good not only for brainstorming but also for communication. Using this structure to explain the risks to others will make the message more impactful. 

The listener will perceive you as more senior and more knowledgeable. It will also be easier to remember your message.

Now, think of your business idea. What are the effects, and who is affected? How are they affected?

Asking the right questions is half the solution.

Be well out there.

Talk soon,

Alex