Trade Tools

PROBLEM SOLVING TEMPLATES AND TOOLS:

1. What is the core problem or opportunity?
   • If it’s broad and involves external and internal factors, consider SWOT Analysis, PESTLE Analysis, or MOST Analysis.
   • If it’s specific to a process or function, look at Root Cause Analysis (RCA) or Fishbone Diagram.
2. What are the primary objectives in addressing this problem?
   • For growth or market-related objectives, consider BCG Matrix, Ansoff Matrix, or Blue Ocean Strategy.
   • For improving organizational effectiveness, think about Balanced Scorecard or Value Chain Analysis.
3. Is the problem related to decision-making under uncertainty?
   • Scenario Planning might be appropriate.

Analyzing the Context

4. Does the problem involve complex stakeholder dynamics or interactions?
   • Stakeholder Analysis or RACI Matrix could be helpful.
5. Is there a need to understand the competitive environment?
   • Porter’s Five Forces or Blue Ocean Strategy would be relevant.
6. Are financial considerations predominant?
   • Cost-Benefit Analysis is useful here.

Identifying Specific Needs

7. Is prioritizing options or alternatives a key requirement?
   • Consider Decision Matrix or Force Field Analysis.
8. Does the problem require a systematic identification of gaps between current and desired states?
   • Gap Analysis is designed for this.
9. Is risk management a major concern?
   • Risk Management Matrix would be a logical choice.
10. Are you looking for a creative or diverse perspective on the problem?
    • Six Thinking Hats or 5 Whys could provide this.
11. Is there a need for a structured approach to brainstorming causes of a problem?
    • The Fishbone Diagram (Ishikawa) can be effective.
12. Is the organization undergoing significant change, and does the strategy need alignment?
    • MOST Analysis or Balanced Scorecard might be suitable.

Other Considerations

13. Do you need a simple tool for a quick analysis or a more complex tool for a detailed study?
    • Simpler tools include 5 Whys or SWOT Analysis; more complex tools include PESTLE Analysis or Balanced Scorecard.
14. Is collaboration and team input a critical aspect of solving the problem?
    • RACI Matrix or Six Thinking Hats encourage collaborative approaches.
15. Do you need to explore multiple potential future scenarios?
    • Scenario Planning is designed for this.

1. SWOT Analysis

Summary: Assesses strengths, weaknesses, opportunities, and threats to understand internal and external factors. Example: A tech startup uses SWOT to evaluate its strong innovation capabilities (Strength), lack of market presence (Weakness), emerging tech market (Opportunity), and intense competition (Threat).

2. PESTLE Analysis

Summary: Analyzes political, economic, social, technological, legal, and environmental factors affecting an organization. Example: A clothing manufacturer examines the impact of changing trade policies (Political), shifts in consumer spending (Economic), and environmental sustainability trends (Environmental).

3. MOST Analysis

Summary: Aligns an organization’s Mission, Objectives, Strategies, and Tactics. Example: A non-profit aligns its mission to promote education, sets objectives for student reach, devises strategies for fundraising, and outlines tactics like social media campaigns.

4. Porter’s Five Forces

Summary: Evaluates an industry’s competitiveness and profitability potential. Example: A coffee shop chain analyzes the threat of new entrants like boutique cafes, bargaining power of suppliers like coffee bean growers, and competitive rivalry.

5. BCG Matrix

Summary: Categorizes business units or products by market growth and market share. Example: A consumer electronics company categorizes its smartphones as ‘Stars’ (high market share in a growing market) and its MP3 players as ‘Dogs’ (low market share in a declining market).

6. Ansoff Matrix

Summary: Explores growth strategies through market and product mix. Example: A food company uses it to decide between introducing a new snack (product development) or expanding to a new geographical market with existing products (market development).

7. Value Chain Analysis

Summary: Identifies activities that create value in a business. Example: A car manufacturer examines its design (inbound logistics), assembly (operations), marketing (outbound logistics), sales, and after-sales services (service).

8. Balanced Scorecard

Summary: Links strategic objectives to performance measures across four perspectives: financial, customer, internal process, and learning & growth. Example: A retail chain uses it to track financial goals (revenue growth), customer satisfaction, operational efficiency, and employee training.

9. Root Cause Analysis (RCA)

Summary: Identifies the root causes of problems to prevent recurrence. Example: A hospital conducts RCA to understand why medication errors occurred, revealing issues in prescription processes.

10. Decision Matrix

Summary: Helps prioritize and make decisions based on set criteria. Example: A university evaluates new software solutions based on criteria like cost, usability, and features.

11. Gap Analysis

Summary: Identifies gaps between current and desired performance. Example: An e-commerce company uses it to identify gaps in customer service and develop strategies to improve.

12. Fishbone Diagram (Ishikawa)

Summary: Analyzes cause and effect for problem-solving. Example: A manufacturing company uses it to investigate the decline in product quality, identifying factors like worker skills and machine maintenance.

13. RACI Matrix

Summary: Clarifies roles and responsibilities in processes. Example: A project team uses it to define who is Responsible, Accountable, Consulted, and Informed for each task in a project.

14. Stakeholder Analysis

Summary: Identifies and prioritizes stakeholders’ interests. Example: A city council conducts it before launching a new public transportation system to understand the concerns of residents, businesses, and environmental groups.

15. Risk Management Matrix

Summary: Assesses and prioritizes risks. Example: An IT company uses it to evaluate risks like data breaches (high impact, high likelihood) and new technology adoption (medium impact, low likelihood).

16. Blue Ocean Strategy

Summary: Identifies uncontested market spaces and innovation opportunities. Example: A beverage company creates a new health drink category, avoiding competition in the saturated soda market.

17. Six Thinking Hats

Summary: Facilitates diversified thinking in problem-solving. Example: A marketing team uses different ‘hats’ to evaluate a campaign from multiple perspectives like factual (White), emotional (Red), negative (Black), positive (Yellow), creative (Green), and process-focused (Blue).

18. Force Field Analysis

Summary: Analyzes forces for and against a change. Example: A university uses it to assess the driving forces for and restraining forces against implementing online courses.

19. 5 Whys

Summary: Drills down to the root of a problem through iterative questioning. Example: A logistics company uses it to determine why shipments are delayed, eventually finding a fundamental issue in the scheduling process.

20. Scenario Planning

Summary: Explores and prepares for possible future scenarios. Example: An energy company uses it to plan for different future scenarios like changes in oil prices, renewable energy trends, and regulatory changes.

21. Cost-Benefit Analysis

Summary: Compares the costs and benefits of decisions/actions. Example: A city evaluates the cost of building a new park against the benefits in terms of community well-being and property value increase.

1. SWOT Analysis

2. PESTLE Analysis

3. MOST Analysis

4. Porter’s Five Forces

5. BCG Matrix

6. Ansoff Matrix

7. Value Chain Analysis

8. Balanced Scorecard

9. Root Cause Analysis (RCA)

1. Identify the Problem: Clearly define the problem.
2. Collect Data: Gather information about the problem’s manifestation.
3. Identify Possible Causal Factors: List potential causes.
4. Identify the Root Cause: Analyze the causal factors to find the root cause.
5. Develop a Plan: Propose solutions to address the root cause.

10. Decision Matrix

11. Gap Analysis

1. Current State: Document the current situation.
2. Desired State: Define the ideal or future state.
3. Identify the Gap: Compare current and desired states to identify the gap.
4. Develop Action Plan: Plan steps to bridge the gap.

12. Fishbone Diagram (Ishikawa)

• Problem: Define the problem at the head of the fish.
• Main Categories: Identify major categories of causes (e.g., People, Processes, Environment).
• Sub-Causes: Break down each category into specific factors contributing to the problem.

13. RACI Matrix

14. Stakeholder Analysis

15. Risk Management Matrix

16. Blue Ocean Strategy

1. Eliminate: What factors should be eliminated that the industry takes for granted?
2. Reduce: What factors should be reduced below the industry’s standard?
3. Raise: What factors should be raised above the industry’s standard?
4. Create: What factors should be created that the industry has never offered?

17. Six Thinking Hats

• White Hat: Focus on data and information.
• Red Hat: Look at problems using intuition, gut reaction, and emotion.
• Black Hat: Consider all the bad points, why it might not work.
• Yellow Hat: Optimistically view the situation; the positives.
• Green Hat: Think creatively, new ideas.
• Blue Hat: Manage the thinking process, overview.

18. Force Field Analysis

19. 5 Whys

1. Ask Why: Why is the problem happening?
2. Answer: Provide an answer based on evidence.
3. Repeat: Ask “Why?” again, based on the answer.
4. Continue: Repeat until the root cause is identified.

20. Scenario Planning

1. Identify the Issue: Define the focus of the scenario planning.
2. Key Factors: List external and internal factors impacting the issue.
3. Draft Scenarios: Develop plausible future scenarios.
4. Analysis: Analyze and discuss each scenario.

21. Cost-Benefit Analysis

 

Regression Analysis

Example scenario: Suppose you’re a sales manager trying to predict next month’s numbers. You know that dozens, perhaps even hundreds of factors — from the weather to a competitor’s promotion to the rumor of a new and improved model — can impact the numbers. Perhaps people in your organization even have a theory about what will have the biggest effect on sales. “Trust me. The more rain we have, the more we sell.” “Six weeks after the competitor’s promotion, sales jump.”

Regression analysis is a way of mathematically sorting out which of those variables does indeed have an impact. It answers the questions: Which factors matter most? Which can we ignore? How do those factors interact with one another? And, perhaps most important, how certain are we about all these factors?

In regression analysis, those factors are called “variables.” You have your dependent variable — the main factor that you’re trying to understand or predict. In Redman’s example above, the dependent variable is monthly sales. And then you have your independent variables— the factors you suspect have an impact on your dependent variable.

This is called the “regression line,” and it’s drawn (using a statistics program like SPSS or STATA or even Excel) to show the line that best fits the data. In other words, explains Redman, “The red line is the best explanation of the relationship between the independent variable and dependent variable.”

In addition to drawing the line, your statistics program also outputs a formula that explains the slope of the line and looks something like this:

y = 200 + 5x + error term

Ignore the error term for now. It refers to the fact that regression isn’t perfectly precise. Just focus on the model:

y = 200 + 5x

This formula is telling you that if there is no x then y = 200. So, historically, when it didn’t rain at all, you made an average of 200 sales and you can expect to do the same going forward, assuming other variables stay the same. And in the past, for every additional inch of rain, you made an average of five more sales. “For every increment that x goes up one, y goes up by five,” says Redman.

Now let’s return to the error term. You might be tempted to say that rain has a big impact on sales if for every inch you get five more sales, but whether this variable is worth your attention will depend on the error term. A regression line always has an error term because, in real life, independent variables are never perfect predictors of the dependent variables. Rather the line is an estimate based on the available data. So, the error term tells you how certain you can be about the formula. The larger it is, the less certain the regression line.

The above example uses only one variable to predict the factor of interest — in this case, rain to predict sales. Typically you start a regression analysis wanting to understand the impact of several independent variables. You might include not just rain but also data about a competitor’s promotion. “You keep doing this until the error term is very small,” says Redman. “You’re trying to get the line that fits best with your data.” Although there can be dangers in trying to include too many variables in a regression analysis, skilled analysts can minimize those risks. And considering the impact of multiple variables at once is one of the biggest advantages of regression analysis.

 

What Mistakes Do People Make When Working with Regression Analysis?

As a consumer of regression analysis, you need to keep several things in mind.

First, don’t tell your data analysts to figure out what is affecting sales. “The way most analyses go haywire is the manager hasn’t narrowed the focus on what he or she is looking for,” says Redman. It’s your job to identify the factors that you suspect are having an impact and ask your analyst to look at those. “If you tell a data scientist to go on a fishing expedition, or to tell you something you don’t know, then you deserve what you get, which is bad analysis,” he says. In other words, don’t ask your analysts to look at every variable they can possibly get their hands on all at once. If you do, you’ll probably find relationships that don’t really exist. It’s the same principle as flipping a coin: Do it enough times and you’ll eventually think you see something interesting, like a bunch of heads all in a row.

Also keep in mind whether you can do anything about the independent variable you’re considering. You can’t change how much it rains, so how important is it to understand that? “We can’t do anything about weather or our competitor’s promotion, but we can affect our own promotions or add features, for example,” says Redman. Always ask yourself what you will do with the data. What actions will you take? What decisions will you make?

Second, “analyses are very sensitive to bad data,” so be careful about the data you collect and how you collect it, and know whether you can trust it. “All the data doesn’t need to be correct or perfect,” explains Redman, but consider what you will be doing with the analysis. If the decisions you’ll make as a result don’t have a huge impact on your business, then it’s OK if the data is “kind of leaky.” But “if you’re trying to decide whether to build 8 or 10 of something and each one costs $1 million to build, then it’s a bigger deal,” he says. The chart below explains how to think about whether to act on the data.

A heuristic (/hjʊˈrɪstɪk/; from Ancient Greek εὑρίσκω (heurískō) ‘I find, discover’), or heuristic technique, is any approach to problem solving or self-discovery that employs a practical method that is not guaranteed to be optimal, perfect, or rational, but is nevertheless sufficient for reaching an immediate, short-term goal or approximation. Where finding an optimal solution is impossible or impractical, heuristic methods can be used to speed up the process of finding a satisfactory solution. Heuristics can be mental shortcuts that ease the cognitive load of making a decision.[1][2]

Examples that employ heuristics include using trial and error, a rule of thumb or an educated guess.

Heuristics are the strategies derived from previous experiences with similar problems. These strategies depend on using readily accessible, though loosely applicable, information to control problem solving in human beings, machines and abstract issues.[3][4] When an individual applies a heuristic in practice, it generally performs as expected. However it can alternatively create systematic errors.[5]

The most fundamental heuristic is trial and error, which can be used in everything from matching nuts and bolts to finding the values of variables in algebra problems. In mathematics, some common heuristics involve the use of visual representations, additional assumptions, forward/backward reasoning and simplification. Here are a few commonly used heuristics from George Pólya‘s 1945 book, How to Solve It:[6]

If you are having difficulty understanding a problem, try drawing a picture.

If you can’t find a solution, try assuming that you have a solution and seeing what you can derive from that (“working backward”).

If the problem is abstract, try examining a concrete example.

Try solving a more general problem first (the “inventor’s paradox“: the more ambitious plan may have more chances of success).

In psychology, heuristics are simple, efficient rules, learned or inculcated by evolutionary processes, that have been proposed to explain how people make decisions, come to judgements, and solve problems typically when facing complex problems or incomplete information. Researchers test if people use those rules with various methods. These rules work well under most circumstances, but in certain cases can lead to systematic errors or cognitive biases.[7]

The Socratic method (also known as method of Elenchus, elenctic method, or Socratic debate) is a form of cooperative argumentative dialogue between individuals, based on asking and answering questions to stimulate critical thinking and to draw out ideas and underlying presuppositions. It is named after the Classical Greek philosopher Socrates and is introduced by him in Plato‘s Theaetetus as midwifery (maieutics) because it is employed to bring out definitions implicit in the interlocutors’ beliefs, or to help them further their understanding.

The Socratic method is a method of hypothesis elimination, in that better hypotheses are found by steadily identifying and eliminating those that lead to contradictions.

The Socratic method searches for general commonly held truths that shape beliefs and scrutinizes them to determine their consistency with other beliefs. The basic form is a series of questions formulated as tests of logic and fact intended to help a person or group discover their beliefs about some topic; exploring definitions, and seeking to characterize general characteristics shared by various particular instances.

 

A3 Project Title: Date Started: Process Owner:

Problem/Opportunity Statement:

Current State:                          Stakeholders:   Wastes:   Project Targets:   Problem/Root Cause Analysis:

Process: Facilitator: Last Update:                      Date Closed:

Team Members:

Future State and Gap Analysis:   Implementation Plan and Key Action Items:   Results:   Learnings / Debrief:

 

Objectives – Key Results (OKRs):

• Define 3 to 5 quarterly goals and 5 key results per objective
• These objectives should be ambitious yet realistic and measured using a 0-100% scale or numeric values.

 

 

Strengths	Weaknesses
Threats	Opportunities

 

 

Waste Walk

Type of Waste	Definition	Observation
Transportation	Excessive movement of People information or material
Inventory	Excessive in process of finished goods inventory. Backlog of Information
Motion	Any movement or step that does not add value to the product or process
Waiting	Long periods of inactivity for people, information
Over Production	Producing more/sooner then the customer demand
Over Processing	Doing more than is required by the customer. Using incorrect procedures
Defects	Errors in process or steps, product quality
Skills Underutilized	Not fully utilizing the talent and creativity of employees.

 

 

Stakeholder Analysis

	Stakeholder Name / Group	Strongly Against	Moderately Against	Neutral	Moderately Supportive	Strongly Supportive	Reasons for Rating	Strategy for Dealing with Resistance
1
2
3
4
5
6
7

 

 

 

Checklist for Performance and Documentation of Audits:

Item	Date of Review	Approved (Y/N)	Date for remedy (if applicable)
Audit team is identified and in-serviced as to reason for audit
Audit team has determined the laws, regulations or guidelines relevant to the objectives of the audit
Effective communication among audit team members has been documented
Pre-audit components and audit process has been developed and documented
Details of the audit program have been documented
Day-to-day progress of QA and ongoing audit have been documented
Audit/QA findings have been documented
Audit/QA findings have been analyzed
Documents are well organized and include documentation of : Summary of audit/QA process; Meetings Audit detail and results Outcomes (education, discipline, revisions to policy and procedure manual, etc.)
Meetings and work group interaction to resolve problems is documented
Audit team participates in development of reports and recommendations to address the identified causes of problems
Recommendations include cause, effect and recommendation for resolution
Reports prepared and analyzed during audit phase included: Excerpts of auditee policies, procedures and documents Write-ups of meetings, inquiries and interviews Spreadsheets and schedules Computer printouts
Report of overall process and results documented and approved

 

Audit Effectiveness Checklist:

Item	Date of Review	Approved (Y/N)	Date for remedy (if applicable)
Records were selected through random selection process
Internal audit has accurately identified problems
Corrective action is taken to resolved problems within 60 days from the date the problem was identified.
Action designed specifically for circumstances of the situation
Was legal advice or consultation with a coding/billing expert sought to determine the next best course of action.
Violations of the compliance policies resulted in consistent and appropriate internal sanctions
Was termination against the offending individual the result?
Mitigating or aggravating circumstances considered
Individuals who failed to detect or report violations of the compliance were also disciplined
Disciplinary actions included: Warnings (oral) Reprimands (written) Probation Demotion Temporary suspension Discharge of employment; Restitution of damages; Referral for criminal prosecution
Inclusion of disciplinary guidelines in in-house training and procedure manuals is sufficient to meet the “well publicized” standard of this element.
Communication resulting in the finding of non-compliant conduct has been documented in the compliance files with: Date of incident; Name of the reporting party; Name of the person responsible for taking action; Action taken
All current and potential practice employees are not listed on the OIG GSA lists of sanctioned individuals
All rejected claims pertaining to diagnosis and procedure codes are reviewed by the coder or coding department.
Subject matter for new policies/procedures has been identified from review of coding problems
Employees identified as making coding errors have received discipline and educated
Employees with identified coding problems have been selected for increased audit until proof of error resolution and competency in problem areas can be established
When required, the computer system has been modified to reduce the number of errors made.
Human resource issues associated with the compliance problems have been identified and followed-up with HR department
Checks and balances have been documented to prevent future errors
Compliance steering committee has been involved in establishing process for error resolution.

 

Audit Process Checklist:

Audit Subject:  _______

Auditor:  _______

Audit Type:             Work Plan             Emerging Risk             For Cause             Other

 

	AUDIT PLANNING	DONE	NOTES (briefly describe steps, documents, etc.)
1	Agree on deadline for audit research to be complete with assigned Director (Background)
2	Description of Risk or Issue to be Audited *Describe the subject matter under review wand if not a planned audit, reason it is being performed
3	Identify any related, prior audits or consultant report (internal or external) (Background) *Note any identified issues, recommendations, unresolved concerns, etc. that may be relevant to this audit
4	Identify any related internal policies or procedures (Background)
5	Review available reference materials and industry information. (Background) *Be able to describe any compliance requirements related to this topic. * Research following sources:  CMS, MAC, OIG, RAC as well any state law and other requirements * Review publications, list serves, and other available resources for information.
6	Obtain input from operations (Background) *Ascertain level of awareness of regulatory requirements and resulting compliance risks *Understand current processes related to compliance *Identify controls, if any, to reduce risk of error
7a	Define audit scope & methodology *Determine specifically what will be audited and the reference for the audit criteria *Prepare the audit tool describing specific audit criteria *Specify source of audited information (progress notes, claim forms, detailed bills, therapy logs, etc.)
7b	Define audit scope & methodology for billing related audits: *Decide if pre-payment or post-payment data will be reviewed *Define the payer mix of the claims to be audited *Set threshold for re-audit or if N/A *Determine what errors will require correction to claims
8	Review with assigned Director *Review all audit planning activity described above *Pay special attention to clarity of the audit scope *Define timeline for audit completion by location, category, etc. *Share plan with directors and other as necessary for group input and agreement to all aspects of audit
	CONDUCTING THE AUDIT	DONE	NOTES (briefly describe steps, documents, etc.)
9	Write the Audit Summary portion of the audit report (i.e. background, objective, scope & methodology)
10	Request any queries needed to identify audit samples
11	Gather source documents *Request any security changes needed to access electronic data *For billing audits, you must obtain claims forms as submitted for payment (post-scrubbing) *Medical record documentation audits done electronically must be verified by requesting at least one copy of the record through the ROI process to validate records released are complete. Choose an audited sample that met all requirements.
12	Review audit samples against the audit criteria
13	Test identified controls *Validate that any controls identified in the planning are in fact, in place and functioning
	AUDIT REPORTING	DONE	NOTES (briefly describe steps, documents,  etc.)
14	Complete the DRAFT Executive Summary and report *Include results, effectiveness of controls and any incidental findings *Review with Compliance Directors and other involved compliance staff *Send to leaders of operations area for response to any findings or to locate missing data they believe is available
15	Finalize the report *Review final audit with Compliance Director and discuss results communications *Route to operational leaders including Compliance Director, operations Director and VP and others as directed
16	Require a corrective action plan for any errors noted *Set reminders on calendar to assure CAPs are received timely and follow-up with VP if CAP is not being completed as required
17	Determine with Director any follow-up auditing to be done *Set timeline for follow-up and assure it is added to the Work Plan
18	Mark audit as “complete” on tracker.

 

Prepared from the OIG Provider Self-Disclosure Protocol issued on April 17, 2013.

MINIMUM INFO:
Item	Description
Review Objective	A statement clearly articulating the objective of the review.
Population	A description of the group of claims about which information is needed, an explanation of the methodology used to develop the population, and the basis for this determination.
Sources of Data	A full description of the source of the data reviewed and the information upon which the review was based, including the sources of payment data, and the documents that were relied upon.
Personnel Qualifications	The names and titles of the individuals who conducted the review. The review should be conducted by qualified individuals (e.g. statisticians, accountants, auditors, consultants, and medical reviewers, and the review report should describe their qualifications.

 

SAMPLING PLAN:
Item	Description
Sampling Unit	Any of the designated elements that constitute the population of interest.
Sampling Frame	The totality of the sampling units from which the sample was selected and the way in which the audit population differs from the sampling frame (and the effect this difference has on conclusions reached as a result of the audit).
Sample Size	The size of the sample reviewed to reach the estimate of the damages. The sample size must be at least 100 claims.
Source of Random Numbers	The sample must be selected through random numbers. The source of the random numbers used must be shown in the report. We strongly recommend the use of OIG’s Statistical Sampling Software, also known as “RAT-STATS,” which is currently available free of charge at https://oig.hhs.gov/compliance/rat-stats/index.asp
Method of Selecting Sampling Units	The method for selecting the sample units.
Sample Design	Unless the disclosing party demonstrates the need to use a different sample design, the review should use simple random sampling. If necessary, the disclosing party may use stratified or multistage sampling. Details about the strata, stages, and clusters should be included in the review report.
Missing Sample Items and Other Evidence	If the review was based on a sample, missing sample items should be treated as errors, pursuant to Federal health care program rules requiring the retention of supporting information for submitted claims. Missing sample items should be noted in the report. The report must also describe any evidence, other than the sample results, that was considered in arriving at the review results.
Estimation Methodology	If the review was based on a sample, because the general purpose of the review is to estimate the monetary losses to the Federal health care programs, the methodology to be used must be variables sampling (treating each individual item in the population as a sampling unit) using the difference estimator (estimates of the total errors in the population are made from the sample differences by multiplying the average audited difference by the number of units in the population).