Articulate Your Theory

To identify how to achieve your selected business outcome, you need to answer your analytic question with evidence. Professor Misra explains how to start: instead of jumping immediately into data, first think critically about how your world works in relation to the core metric at the heart of your selected business outcome. You already have a hunch about how things might work differently than currently thought or could be changed to positively impact your core metric. Here, you’ll elaborate on that hunch to develop a theory. That may sound complex, but you’ll see that for our purposes a theory is a simple statement that provides an explanation of the relationship between one or more factors and your core metric. You will identify a theory by following these steps.

1.Describe the Status Quo Understanding: Start by capturing the current “accepted wisdom” in your business for what drives your core metric. What key factors impact it and how do they “roll up” to your core metric? Create a flowchart to represent these relationships visually.

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2.Articulate Your Theory: Now return to the hunch that motivated your analytic objective.

a.What do you suspect the “accepted wisdom” misses about your core metric that would allow your organization to improve it. Describe this in the table provided.

b.Now, write 1-2 sentences that explain how this missing factor or factors impact your core metric.

3.Update the Status Quo Understanding: Revise the flowchart to incorporate the factor or factors you articulated in your theory. Indicate any new factors in red.

4.Define Your Factors: Capture the factors you’ve identified in a simple list. To ensure you can communicate about them effectively, briefly define each. Then, decide which you wish to include going forward. You may have identified some that do not have a significant impact. To limit your scope, you do not need to carry those forward.

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