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MANAGEMENT: Framework vs Steps, When each should be used While solving a problem
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Framework vs Steps

When each should be used

While solving a problem

By Marwan Emile Faddoul(Managing Partner,  NFG Consulting LLC)

BT 201512 160 02 Management 002Finding solutions to delicate and worrying problems is where a CEO really earns his crust. But how should he approach this problem to achieve the best and most efficient results? In this article, I will present two ways of solving problems - the first is the framework approach; the second is through the use of steps.

Through the framework approach, when faced with a new and complex problem, the CEO often overcomes the obstacle by dividing it into simple components, then working on each sub-problem on its own. To do so, the decision-maker will develop a framework where he will break his difficult task into smaller obstacles. The CEO will do that, simply because he doesn't know ahead of time what he will ultimately do. As management consultants, we are always working on projects where we have to solve unknown and complex problems - the only way to approach these problems is to build a framework.

About a year ago, one of our American clients came to me and said: "Marwan, the middle class society is growing in China; we should care to take advantage of this situation and have a presence in the PRC region". Helping my client, Jim identify the best legal structure to register in China - to optimize everything about his software company - was not an easy task. To simplify the matter, we decided to first build a framework, and then divide the main problem into smaller sub-problems. We divided it into two parts: one inside china and the one outside China.

BT 201512 160 03 Management 002
Subsequently, we decided to break these two parts into even smaller ones. For mainland China, we raised eight sub-problems, where we presented all the channels that could be used to register a foreign entity in China. These included: two joint-venture types (E-JV & C-JV); a Wholly Foreign-Owned Enterprise (WOFE); a branch office; a representative office; a foreign-invested company limited by shares; a foreign-invested holding company and, finally, a partnership. These sub-problems where further divided into micro-problems. Here, for each channel, we raised several issues, such as the time needed to establish a company, the requested fees and capital for the incorporation, money transfer matters as well as tax issues.

Finally, we documented the research needed to collect all the information that answered the questions in our framework. The same process was applied for registering an entity outside of China. The framework, along with the research, allowed us to identify the type of entity that could best serve the company's short- and long-term objectives.

BT 201512 160 04 Management 002In some cases, when we are solving unknown and difficult problems, we build the framework, divide the problem into sub-problems, and then try to solve each one on its own. We implement several rapid iterations for each one, where we might try and fail several times but, in the end, we will manage to find a way.

Moving to our "steps approach" now and, for this approach, when the answer to a problem is already known, the CEO will proceed by outlining steps. Here he will apply the "divide and conquer" approach, simply because his sole objective is to get stuff done. The steps approach is usually applied to a "known problem".

BT 201512 160 01 Management 001Going back to our example, we recommended our client, Jim to establish a partnership entity in TEDA, as it represented the best legal structure for his firm. Now that he knew which structure to work with, Jim decided to implement the process and establish his company in Tianjin. He divided the process into several steps. First, he asked his Chinese assistant to request all the required documents from the registration bureau. Then he hosted a Skype call with his partners - both in China and overseas - to determine the best way for the partnership to cooperate. Jim's lawyer then started to deal with the registration bureau to finalize the registration process. Finally, his accountant, along with his HR staff, took care of the remaining matters, such as tax and employment issues, and social security.

Basically, what Jim did in the steps approach was to divide the registration process into new partitions, and then asked the person in charge of each partition to handle his or her task. As mentioned, he had previously used the divide and conquer approach in order to implement and finalise the registration process.

In conclusion, both the framework approach and the steps approach are tools used to help resolve obstacles. Nonetheless, if we find ourselves facing an unknown issue, the best way to handle such matters is to build a framework, even though the period allocated for each sub-problem in a framework approach is less concrete than the partitions in the steps approach. At the end of the day, you care to solve your problems, and for each situation there's a tool - you simply need to use the right one at the right time.


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