May 22, 2018

4 Mental Models of an Effective Business Analyst

When was the last time you dealt with a complex and unfamiliar situation? During your last project? Last week? This morning?

The key function of business analysis is to introduce and manage change in an organization. As Business Analysts, our job is to guide our stakeholders through complex and uncertain territory. So, it’s a major competitive advantage to be able to recognize these new situations and frame them in a way that helps us shepherd our customers through them. But how do we do that?

One way is by developing a set of mental models that can help us navigate unfamiliar terrain. A mental model is a simplified psychological representation of how things work in the real world. We use mental models every day, but most of them are so simple we don’t even realize we’re using them.

Imagine if every time you wanted to go through a door you had to think through each individual step of the process:

  1. I need to be over there, but something is blocking my way…
  2. This part of the wall looks different than every other part…
  3. I wonder what this knob does? I’ll try turning it…

Instead, you have a mental model of a door and your brain knows exactly what to do when you see one.

What our brains are doing is using a shortcut to say “Oh, I recognize this. This is another one of those.” By chunking related things together, our brains conserve energy. It also allows us to understand incredibly complex things very quickly by building off our previous experiences.

Charlie Munger, vice chairman of Berkshire Hathaway (and a huge proponent of using mental models), suggests using a checklist of mental models as part of your decision-making process. He describes this as forming a “latticework” of mental models on which you can hang your experiences. By running through this checklist when you encounter a new problem you can frame it in a new, more helpful, light.

Here are 4 mental models that will help you be more successful as a business analyst:

1. Second- and Third-Order Effects

Think about a small country that is having a pest problem. To get rid of those pests they bring in a non-native predator. But, there are no other animals that eat the predator and it has all the food it could ever want, so it breeds like crazy. Now it’s the new pest!

That illustrates a failure to think through second- and third- order effects. As business analysts, we need to think past the initial effects of a decision to help weed out non-obvious effects we need to help prepare and plan for. 

Here are some examples of helping your stakeholders think past the first-level effects:

  • If we built feature X, what else would we have to build or implement to support it (help documentation, marketing materials, staff training, etc.)?
  • If we implement process Y, how would your job change? Who else’s job might this change?
  • If we kick off marketing campaign Z, are we ready for it? Can our servers scale to handle the additional demand? Are our call centers prepared for the extra volume? Is our logistics team able to handle all the shipping and returns?

Bonus: A companion to second- and third-order effects is digging past the first level of causes by using a technique called the Five Whys.

The Five Whys

The basic principle is that, when trying to analyze a problem, you should ask “Why” five times to get to the root cause. For example:

Problem: Our customers keep asking for their pizzas for free.

Because their pizzas are getting delivered late.

Why are the pizzas late?
Because our drivers are taking too long to get there.

Why are they taking so long?
Because they are taking too many pizzas at once and must drive to different parts of town to deliver them all.

Why are they taking so many pizzas?
Because they are just grabbing all the pizzas that are ready to go on their way out the door.

Why are they just grabbing everything at once?
Because they don’t have time to look at each of the addresses and sort them into delivery routes.

If you just look at the initial problem, you might try to solve it by discontinuing the marketing campaign that offers late pizzas for free, or by hiring more drivers. But by asking the five whys in this scenario, we can see that a better solution might be to train someone in the store to sort the deliveries into routes that make sense.

2. Inversion

Sometimes, when a problem is too daunting, it helps to turn it upside down and look at it from a different angle. When working with a stakeholder who is trying to define what functionality they need, it’s often easier to start by asking them what they don’t need.

Example: When starting a project, rather than asking “What would make this project a success?”, ask “What would make this project fail?”. Then make plans to avoid those things like the plague!

A great exercise for walking a group through this is called the pre-mortem. In a pre-mortem, get your team together and ask them to imagine a hypothetical future scenario where everything has gone wrong.

Do something like this: It’s a week after your product launch and it was a total abject failure. Nothing went right; you botched the launch, your customers hated the product, and now you’re being sued by your suppliers (feel free to customize your worst-case scenario to whatever makes sense for your team).

Now comes the crucial question. Ask your team: “What happened? How did we get to this point?” You’ve now identified a list of things you don’t want to have happen and can make plans to mitigate those risks.

The pre-mortem can be used over any time horizon: when kicking off a new project or product, release planning, feature story mapping, and even for something as short as a single Sprint. 

3. Confirmation Bias

Confirmation bias is our tendency to interpret facts or events in a way that confirms our pre-existing beliefs. If we already think something is true (or just want it very badly to be true), we’re much less likely to pay attention to anything that runs counter to our beliefs.

If you suspect someone is falling prey to confirmation bias, ask “What information would make you change your mind?” If the answer is “nothing”, then that’s a great big neon sign for confirmation bias. When you’re in a group setting, make sure opposing viewpoints are given fair consideration. A question I like to ask in Sprint Planning sessions is, “What has to go right for this plan to work?” Often what gets put into a Sprint Backlog is what the team really wants to get done, rather than what is realistic.

This is another case where the pre-mortem can be fantastically helpful as it forces people who might otherwise be wedded to their plan to deliberately think of areas where they may have missed something.

4. Availability Bias

In his book Thinking Fast and Slow, Daniel Kahneman describes the Availability Bias (or Availability Heuristic) as a person’s tendency “…to assess the relative importance of issues by the ease with which they are retrieved from memory.”

We remember and overemphasize the significance of things that have happened recently or in an easy to remember way (whatever’s latest and loudest). Therefore, people tend to overestimate the risk of things like shark attacks and plane crashes because they get the headlines.

The best way to overcome this tendency is the use of data and solid research. When someone tells you, “We need Feature X because our customers are always complaining about Y”, you may be encountering the availability bias.

A good way to solve for this would be to dig into the customer complaint data to analyze whether complaints about Y really did make up a significant percent of all complaints versus everything else. If not, it may just be that the person making the feature request heard from Tim in Accounting that they needed it.

Continuous Refinement is Key

Think of the above mental models as a starting point, not an exhaustive list. It’s important to continuously add to and refine your checklist of models to avoid “man with a hammer” syndrome. By using these mental models to help navigate unfamiliar territory, we can deliver more value as business analysts.

What about you? What mental models have you found useful in your business analysis work?

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