Once you have identified your objective, you are ready to begin researching the “problem” preventing you

from reaching your objective. Typically, research is the first step to gaining the knowledge needed to understand the problem.

But, more than research alone, you must also diagnose the situation to get the information you need to solve the problem. Why?

 

Research is a process of gathering, analyzing, and interpreting information to gain new knowledge.

Its purpose is to contribute to your existing body of knowledge. 

Diagnosis is identifying the cause or nature of a specific problem or condition. It’s about

determining what is wrong or why something is not functioning as expected.

A McKinsey study showed that prominent company CEOs made the right decision 52% of the time.

This blog post on why research and diagnosis are crucial to getting the correct information will

help you get the right information to make better decisions more often.

 

Much of the strategy is asking what is going on here. The fundamental question

is not just deciding what to do but comprehending the situation.

 

  Navigating Business Challenges: Research vs. Diagnosis 

 

In a dynamic business landscape, making informed decisions is paramount. Two essential processes

that drive these decisions are research and diagnosis. While they share commonalities, they serve distinct

purposes when addressing business problems or seizing opportunities. 

Much of the strategy is asking what is going on here. The fundamental question is not just about deciding

what to do but comprehend the situation. 

 

In this blog post, I explore the differences between conducting research and performing a diagnosis

in the context of solving business challenges and capitalizing on opportunities.

 

The Art of Research

 

Research is a systematic and comprehensive exploration of subject matter, often involving data collection,

analysis, and interpretation. Business research is used to understand markets, industry trends, customer behavior,

and competition. It’s a tool for acquiring knowledge to shape strategic decisions. Following is an outline of this discovery process.

 

1. Scope: Business research can be extensive, aiming to understand a particular area comprehensively. For example,

a company may conduct market research to assess consumer preferences and industry trends.

2. Objectives: The primary objective of business research is knowledge acquisition. It seeks to answer

questions and uncover patterns that can inform strategy, product development, marketing campaigns, and more

3. Data Collection: Researchers gather data from various sources, such as surveys, interviews,

market analysis, and historical data. This data is analyzed to extract insights.

4. Outputs: Research outcomes are often reports, market analyses, whitepapers, or data-driven recommendations.

They contribute to the body of knowledge and guide future actions.

5. Nature: Research is an ongoing process that only sometimes leads to immediate solutions.

It lays the foundation for informed decision-making and can be used in various business contexts.

 

The Science of Diagnosis

 

Diagnosis is a focused inquiry to identify the root cause or nature of a specific problem or opportunity. In a business context,

diagnosis is instrumental in pinpointing issues within an organization, product, or process that help determine the cause of

the situation or problem. All of this enables you to determine how you might solve the problem.

 

1. Scope: Diagnosis has a narrow scope, concentrating on a specific issue or opportunity. For instance,

a business might diagnose operational inefficiencies affecting production output.

2. Objectives: The primary objective of diagnosis is to uncover the cause of a problem or the nature 

of an opportunity. It seeks to answer the “why” behind a situation.

3. Data Collection: The data collected in a diagnosis is tailored to the specific issue or opportunity

under investigation. It may involve examining financial records, conducting performance audits, or assessing workflow.

4. Outputs: The output of a diagnosis is a precise determination of the problem’s cause or the

nature of an opportunity. It serves as the foundation for implementing targeted solutions.

5. Nature: Diagnosis is action-oriented, with its findings directly influencing decisions and solutions.

It is typically problem-focused and aims to drive immediate improvements.

 

Both research and diagnosis are invaluable tools in the business toolkit. Still, they serve distinct roles in problem-solving and opportunity seizing. 

Research provides the knowledge and context necessary for informed decision-making, offering a broader perspective.

 Diagnosis, conversely, narrows the focus to identify specific issues or opportunities and is instrumental in implementing targeted solutions.

Successful businesses often employ a combination of research and diagnosis, recognizing that a holistic

approach to decision-making involves understanding the broader landscape and addressing specific internal challenges.

 By knowing when to research and when to diagnose, organizations can navigate the complex terrain of

business with confidence and agility, turning challenges into opportunities for growth and success.

 

Caution: Pay Attention To Your Biases

 

Bias can play a significant role in business research and diagnosing a business situation or problem.

Bias can skew the collection and interpretation of data, leading to accurate or complete assessments.

Here’s how bias can impact both research and diagnosis.

 

In Business Research:

 

1. Selection Bias: When conducting research, there may be a tendency to select data sources, surveys, or

participants that align with preconceived notions or desired outcomes. This bias can lead

to a sample that only accurately represents part of the population.

2. Confirmation Bias: You may unconsciously seek evidence supporting your beliefs or hypotheses

while ignoring or downplaying conflicting information. This confirmation bias can lead to a skewed analysis of data.

3. Cultural Bias: Cultural biases can affect how research questions are framed, impacting the data collected

and the interpretation of results. You may unintentionally overlook culturally diverse perspectives.

4. Publication Bias: In academic and industry research, there’s often a bias toward publishing positive results

and overlooking studies with negative or inconclusive findings. This bias can create a skewed body of knowledge.

 

In Diagnosis of Business:

 

1. Cognitive Biases: Diagnosing business situations may be susceptible to cognitive biases such as anchoring

(relying too heavily on the first piece of information encountered), availability heuristic (overvaluing

readily available data), and overconfidence bias (overestimating one’s knowledge or abilities).

These biases can influence the assessment of problems.

2. Emotional Bias: Emotions can cloud judgment when diagnosing a business situation. Fear,

over-optimism, or attachment to particular solutions, can lead to biased assessments and decisions.

3. Groupthink: In group settings, such as board meetings or team discussions, groupthink can occur. This bias

involves conformity to the dominant perspective within the group, even if it’s not the most accurate assessment of the situation.

4. Status Quo Bias: People are often biased toward maintaining the status quo, even when evidence suggests

a need for change. This bias can hinder the diagnosis of problems that require significant adjustments.

5. Sunk Cost Fallacy: You may be influenced by the resources (time, money, effort) already invested in a particular

course of action, even when it’s clear that changing direction is the better choice. This fear can lead to a biased assessment of the situation.

 

How To Mitigate Biases:

 

To mitigate bias in both business research and diagnosis, you should adopt some of these practices:

1. Diverse Perspectives: Encourage various participants, teams, and perspectives to minimize biases from homogenous groups.

2. Transparency: Be transparent about research methods, data sources, and the reasoning behind diagnosis to allow for scrutiny and accountability.

3. Peer Review: Subject research findings and diagnoses to peer review or external evaluation to identify and address biases.

4. Challenge Assumptions: Encourage a culture where assumptions are regularly challenged and alternative viewpoints considered.

5. Training and Awareness: Training and awareness programs help individuals recognize and mitigate biases in their decision-making processes.

6. Data Quality: Ensure that data collected for research is representative and free from biases. Your critical thinking techniques should be put to work.  

7. Third-Party Consultation: In some cases, bringing in external consultants or experts can provide an unbiased perspective on business problems.

8. Continuous Learning: Encourage a culture of constant learning and adaptation based on evidence and feedback.

 

Biases can significantly impact business research and diagnosing business situations or problems. Recognizing and actively working

to mitigate bias is crucial for making well-informed decisions and arriving at accurate diagnoses.

It fosters a more objective, evidence-based approach to addressing business challenges and opportunities.

 

 What are the benefits of researching and diagnosing when confronted

with a complex problem or risky opportunity?

 

Combining both research and diagnosis when confronted with a complex problem or a risky opportunity

offers numerous benefits that can significantly enhance decision-making and problem-solving processes:

 

1. Comprehensive Understanding: Research provides a foundation of knowledge and data, while diagnosis adds

depth and context. Together, they offer a more comprehensive understanding of the situation, enabling a more accurate assessment.

2. Enhanced Problem Framing: Research helps identify the core elements of a problem or opportunity, while diagnosis

allows for a deeper exploration of its underlying causes, contributing factors, and implications.

This process leads to a well-framed problem or opportunity statement.

3. Informed Decision-Making: The combination of research and diagnosis equips decision-makers with the information

to make well-informed choices. It reduces the reliance on guesswork, particularly in complex or risky situations.

4. Risk Mitigation: Diagnosis helps identify potential risks and challenges that might not be immediately

evident through research alone. This proactive approach allows for risk mitigation strategies to be developed.5. 

5. Innovative Solutions: Diagnosis provides information that encourages creative thinking by uncovering hidden connections

and perspectives. It can lead to innovative solutions that are not apparent solely through research.

6. Resource Allocation: Research and diagnosis assist in identifying where resources should be allocated for the most significant

impact. This allocation ensures that efforts focus on the most critical aspects of the problem or opportunity.

7. Efficiency: While research provides a wealth of information, diagnosis helps sift through the data to extract what is most

relevant. This efficiency saves time and resources by concentrating efforts on critical areas.

8. Adaptability: Combining research and diagnosis allows for flexibility in decision-making. New insights or

changes in the situation can be accommodated more readily, ensuring that strategies remain relevant.

9. Clarity in Communication: A combination of research and diagnosis results in more precise and

compelling communication of findings and recommendations to customers, stakeholders, or team members.

10. Continuous Improvement: Integrating research and diagnosis fosters a culture of constant

improvement. Organizations and individuals become better equipped to tackle future

challenges and opportunities effectively.

11. Alignment of Objectives: Research and diagnosis help align objectives and strategies with the underlying i

ssues or goals. This alignment ensures that actions taken are directly relevant to addressing the problem or seizing the opportunity.

11. Long-Term Sustainability: Solutions derived from a combination of research and diagnosis are often more

sustainable because they address root causes and consider long-term implications.

12. Confidence in Decisions: Decision-makers can have greater confidence in their choices based on a

thorough understanding of the situation through research and diagnosis.

13 Minimized Guesswork: The blend of research and diagnosis reduces guesswork and assumptions,

reducing the likelihood that you will make decisions based on incomplete or biased information.

14. Better Problem-Solving Culture: Organizations prioritizing research and diagnosis foster a culture

of evidence-based decision-making and critical thinking, leading to better problem-solving capabilities.

 

Example:

 

According to Edward de Bono, diagnosis can transform one’s view of the situation, bringing 

a radically different perspective to bear—for example, IBM. 

 

IBM was struggling in the computer market in the 1990s. Many products were involved in complete computer systems,

and many companies specialized in selling each. Competition for each of the products was intense. When Lou Gerstner

became CEO in 1993, he examined how IBM struggled against the competition.

 

His research and diagnosis concluded that IBM was the only company that could deliver large, fully customized

computer systems. He changed the company from focusing on individual products to a company focused on a completely

integrated computer system company. IBM was the only company in the market that could do that. That insight turned

the company around and made it the premier company in the market.

 

Conclusion

 

Combining research and diagnosis enhances decision-making, mitigates risks, fosters innovation, and ultimately leads to

more effective solutions for challenging problems or risky opportunities. This holistic approach ensures that decisions

are based on a deep understanding of the situation and its underlying dynamics.