ROI Case File No.265 | 'Nordic IT Startup's Decision-Making'

Chapter One: Leadership Paralyzed by Indecision - Limits of Intuition-Based Decision-Making

The week following the resolution of AgriTech Colombia's Mandala Chart case, a consultation arrived from the Nordics regarding a startup's decision-making. Episode 265 of Volume 21 "Deepening Analysis" tells the story of logically organizing complex options to guide decisions made with conviction.

"Detective, we're stuck before a critical decision. Should we expand into new markets or deepen existing ones? Both are attractive, both carry risks. Leadership opinions are divided, and meetings go in circles. We want to decide with logic, not intuition."

NordicFlow Systems' co-founder, Erik Andersson from Stockholm, visited 221B Baker Street with an anguished expression. In his hands were photos of whiteboards covered with countless sticky notes and records of discussions that still wouldn't converge.

"We provide manufacturing SaaS in Sweden. We've captured top share in the Nordic market and are at the stage to consider our next step. But leadership is divided on which direction to take."

NordicFlow Systems at a Crossroads: - Founded: 2020 (Manufacturing SaaS) - Current market: 4 Nordic countries - Customers: 280 companies - Annual revenue: $15M - Option A: Geographic expansion to Germany/France - Option B: Product line expansion in Nordic market

Erik's expression showed deep uncertainty.

"The problem is discussions become intuitive. 'Germany has a large market,' 'But high risk,' 'Nordics are safer,' 'But growth is limited.' Opinions emerge, but we have no method to organize them systematically and evaluate them logically."

Confusion in Decision Meetings: - Meeting count: 15 times (over 3 months) - Discussion time: Cumulative 60 hours - Number of opinions: 147 (all recorded on sticky notes) - Conclusion: Undecided - Leadership split: CEO/CTO vs CFO/COO

"The more we discuss, the more confused we become. Isn't there a more systematic way to think?"

Chapter Two: Introducing Logic Trees - The Technology of Hierarchizing Questions

"Mr. Andersson, what structure guides your current discussions?"

To my question, Erik showed photos of whiteboards covered in sticky notes.

"Basically free discussion. We voice all ideas and try to organize them. But the more opinions we have, the less we see the whole picture."

Current Decision-Making Process (Unstructured): - Format: Brainstorming - Opinion handling: All listed equally - Organization method: None (sticky notes just accumulate) - Evaluation criteria: Unclear - Result: Discussion doesn't converge

I explained the importance of logical thinking.

"Decision-making is the act of answering questions. Decompose those questions hierarchically and answer at each level. That's the Logic Tree."

⬜️ ChatGPT | Catalyst of Concepts

"Break big questions into small questions. Answers lie at the branch tips."

🟧 Claude | Alchemist of Narratives

"Logic is a tree. From roots to trunk, trunk to branches - follow the path and you won't lose your way."

🟦 Gemini | Compass of Reason

"Logic Trees are the skeleton of decision-making. Excluding intuition, guiding with logic."

The three members began their analysis. Gemini deployed the "Startup Strategy-Specific Logic Tree" framework on the whiteboard.

Three Types of Logic Trees: - What Tree - Decompose "what's the problem" (problem-solving) - Why Tree - Decompose "why does it happen" (root cause analysis) - How Tree - Decompose "what to do" (solution development)

"Mr. Andersson, let's structure NordicFlow's decision with a Logic Tree."

Chapter Three: Hierarchizing Decisions - Branching Options

Phase 1: Clarifying the Question (1 week)

First, we clarified the fundamental question.

Fundamental Question: "What strategy should NordicFlow take to achieve maximum growth over the next 3 years?"

Phase 2: Expanding the How Tree (2 weeks)

We hierarchically decomposed the question.

Level 1: Strategic Direction - A. Geographic expansion - B. Product expansion - C. Vertical integration (M&A)

Level 2: Concretizing A (Geographic Expansion) - A1. Western Europe entry (Germany/France) - A2. Eastern Europe entry (Poland/Czech Republic) - A3. UK entry

Level 2: Concretizing B (Product Expansion) - B1. Existing product feature expansion - B2. Related new product development - B3. Different industry product development

Level 3: Execution Methods for A1 (Western Europe Entry) - A1-1. Direct entry (establish local entity) - A1-2. Through partners (sales agents) - A1-3. M&A (acquire local company)

Phase 3: Setting Evaluation Criteria (1 week)

We clarified criteria for evaluating each option.

Evaluation Axes: 1. Market size (revenue potential in 3 years) 2. Growth rate (average annual growth rate) 3. Investment amount (initial investment required) 4. Risk (failure probability) 5. Organizational load (human/time resources) 6. Competitive advantage (probability of winning)

Phase 4: Quantitative Evaluation (2 weeks)

We scored each option on evaluation axes.

A1. Western Europe Entry Evaluation: - Market size: 10 points (5x Nordic size) - Growth rate: 8 points (30% annual expected) - Investment amount: 4 points (€6.5M initial required) - Risk: 5 points (large cultural/regulatory differences) - Organizational load: 4 points (local team building needed) - Competitive advantage: 6 points (strong competitors exist) - Total: 37 points

B2. Related New Product Development: - Market size: 6 points (2x within Nordics) - Growth rate: 7 points (25% annual expected) - Investment amount: 8 points (€1.6M initial) - Risk: 7 points (can leverage existing customer base) - Organizational load: 7 points (manageable with existing team) - Competitive advantage: 9 points (deep customer understanding) - Total: 44 points

After evaluating all options similarly, a surprising conclusion emerged.

Evaluation Results (Top 3): 1. B2. Related new product development: 44 points 2. B1. Existing product feature expansion: 42 points 3. A1. Western Europe entry: 37 points

Chapter Four: Creating Conviction in Choice - The Path Data Shows

Phase 5: Simulation and Verification (1 month)

We conducted 3-year simulations for the top 3 options.

B2 "Related Product Development" 3-Year Plan:

Year 1: - Investment: €1.2M development costs - New product: Inventory management module - Revenue: 30% of existing customers adopt, +€2.5M - Profit: +€800K

Year 2: - Investment: Additional €800K development - New product: Quality control module - Revenue: Existing + new customers +€6.5M - Profit: +€3.2M

Year 3: - Investment: €400K marketing - Product line established - Revenue: +€12M (cumulative) - Profit: +€7.2M (cumulative)

A1 "Western Europe Entry" 3-Year Plan:

Year 1: - Investment: €5M local entity establishment - Revenue: Localization/sales activities +€1.6M - Profit: -€3.2M (upfront investment)

Year 2: - Investment: Additional €1.6M personnel - Revenue: +€8M - Profit: +€1.6M (cumulative -€1.6M)

Year 3: - Investment: €800K - Revenue: +€18M - Profit: +€6.5M (cumulative +€4.8M)

Final Decision Meeting:

We shared Logic Tree and simulation results with all leadership.

CEO (initially geographic expansion camp): "Looking at the numbers, it's clear. Western Europe entry is attractive but high-risk and takes time to profit. Related product development has higher certainty."

CFO (initially product expansion camp): "Financially too, related product development is sound. Faster investment recovery, stable cash flow."

Conclusion (Unanimous): Make "related product development" the primary strategy, and after its success, consider Western Europe entry in 3 years

Results After 12 Months:

Strategy Execution Results: - New product "Inventory Management Module" development complete - 42% of existing customers adopted (exceeded 30% plan) - New customers: 25 companies acquired - Annual revenue: $15M → $20M (+33%) - Operating profit: $1.6M → $3.2M (doubled)

Organizational Changes: - Decision-making speed: 3-month discussion → 2 weeks - Leadership unity: From conflict to cooperation - Employee satisfaction: 3.5 → 4.6 (clear direction)

Chapter Five: The Detective's LOGIC Diagnosis - Reasoned Answers

Holmes compiled the comprehensive analysis.

"Mr. Andersson, the essence of Logic Trees is 'visualizing thought.' Organize tangled thoughts in your head hierarchically and evaluate logically at each level. Decide with data and logic, not intuition. That process creates conviction."

Final Report After 24 Months:

NordicFlow Systems established overwhelming share in the Nordic market.

Final Results: - Annual revenue: $15M → $37M (2.5x) - Customer count: 280 → 520 companies - Product line: 1 product → 4 products - Market share: 45% Nordic manufacturing SaaS market

Erik's letter contained profound learning:

"Through Logic Trees, we transformed from 'leadership that decides by intuition' to 'leadership that guides with logic.' What mattered most was hierarchically decomposing complex questions and giving clear answers at each level. Now we always draw Logic Trees for important decisions. It's become our common language."

The Detective's Perspective - Logic Eliminates Hesitation

That evening, I contemplated the essence of decision-making.

The true value of Logic Trees lies in thought transparency. In intuitive discussions, why that conclusion was reached remains unclear. But logically hierarchized thought processes can be traced and verified by anyone.

Transparency creates conviction, and conviction creates execution power.

"Hesitation covers thought like fog. But when you shine the light of logic, the path becomes clear."

The next case will also depict the moment when logical thinking opens an organization's future.

"Intuition is sometimes correct. But only logic can explain. Unexplainable decisions cannot move organizations." - From the Detective's Notes