how do you solve a business problem

Good problem solving typically involves designing experiments to reduce key uncertainties. Each move provides additional information and builds capabilities.

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3. take a dragonfly-eye view.

Dragonfly-eye perception is common to great problem solvers. Dragonflies have large, compound eyes, with thousands of lenses and photoreceptors sensitive to different wavelengths of light. Although we don’t know exactly how their insect brains process all this visual information, by analogy they see multiple perspectives not available to humans. The idea of a dragonfly eye taking in 360 degrees of perception 6 Philip Tetlock and Dan Gardner, Superforecasting: The Art and Science of Prediction , New York, NY: Crown, 2015. is an attribute of “superforecasters”—people, often without domain expertise, who are the best at forecasting events.

Think of this as widening the aperture on a problem or viewing it through multiple lenses. The object is to see beyond the familiar tropes into which our pattern-recognizing brains want to assemble perceptions. By widening the aperture, we can identify threats or opportunities beyond the periphery of vision.

Consider the outbreak of HIV in India in the early 1990s—a major public-health threat. Ashok Alexander, director of the Bill & Melinda Gates Foundation’s India Aids Initiative, provided a brilliant example of not just vision but also dragonfly vision. Facing a complex social map with a rapidly increasing infection rate, he widened the problem’s definition, from a traditional epidemiological HIV transmission model at known “hot spots,” to one in which sex workers facing violence were made the centerpiece.

This approach led to the “Avahan solution,” which addressed a broader set of leverage points by including the sociocultural context of sex work. The solution was rolled out to more than 600 communities and eventually credited with preventing 600,000 infections. The narrow medical perspective was sensible and expected, but it didn’t tap into the related issue of violence against sex workers, which yielded a richer solution set. Often, a secret unlocks itself only when one looks at a problem from multiple perspectives, including some that initially seem orthogonal.

The secret to developing a dragonfly-eye view is to “anchor outside” rather than inside when faced with problems of uncertainty and opportunity. Take the broader ecosystem as a starting point. That will encourage you to talk with customers, suppliers, or, better yet, players in a different but related industry or space. Going through the customer journey with design-thinking in mind is another powerful way to get a 360-degree view of a problem. But take note: when decision makers face highly constrained time frames or resources, they may have to narrow the aperture and deliver a tight, conventional answer.

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4. pursue occurrent behavior.

Occurrent behavior is what actually happens in a time and place, not what was potential or predicted behavior. Complex problems don’t give up their secrets easily. But that shouldn’t deter problem solvers from exploring whether evidence on the facets of a solution can be observed, or running experiments to test hypotheses. You can think of this approach as creating data rather than just looking for what has been collected already. It’s critical for new market entry—or new market creation. It also comes in handy should you find that crunching old data is leading to stale solutions.

Most of the problem-solving teams we are involved with have twin dilemmas of uncertainty and complexity, at times combined as truly “wicked problems.” 7 A term coined in a now famous 1973 article: Horst W. J. Rittel and Melvin Webber, “Dilemmas in a general theory of planning,” Policy Sciences , 1973, Number 4, pp. 155–69. For companies ambitious to win in the great unknown in an emerging segment—such as electric cars or autonomous vehicles, where the market isn’t fully established—good problem solving typically involves designing experiments to reduce key uncertainties, not just relying on existing data. Each move (such as buying IP or acquiring a component supplier) and each experiment (including on-road closed tests) not only provides additional information to make decisions but also builds capabilities and assets that support further steps. Over time, their experiments, including alliances and acquisitions, come to resemble staircases that lead to either the goal or to abandonment of the goal. Problem-solving organizations can “bootstrap” themselves into highly uncertain new spaces, building information, foundational assets, and confidence as they take steps forward.

Risk-embracing problem solvers find a solution path by constantly experimenting. Statisticians use the abbreviation EVPI—the expected value of perfect information—to show the value of gaining additional information that typically comes from samples and experiments, such as responses to price changes in particular markets. A/B testing is a powerful tool for experimenting with prices, promotions, and other features and is particularly useful for digital marketplaces and consumer goods. Online marketplaces make A/B testing easy. Yet most conventional markets also offer opportunities to mimic the market’s segmentation and use it to test different approaches.

The mindset required to be a restless experimenter is consistent with the notion in start-ups of “failing fast.” It means that you get product and customer affirmation or rejection quickly through beta tests and trial offerings. Don’t take a lack of external data as an impediment—it may actually be a gift, since purchasable data is almost always from a conventional way of meeting needs, and is available to your competitors too. Your own experiments allow you to generate your own data; this gives you insights that others don’t have. If it is difficult (or unethical) to experiment, look for the “natural experiments” provided by different policies in similar locations. An example would be to compare outcomes in twin cities, such as Minneapolis–St. Paul.

It’s a mistake to think that your team has the smartest people in the room. They aren’t there. They’re invariably somewhere else. Nor do they need to be there if you can access their intelligence via other means.

5. Tap into collective intelligence and the wisdom of the crowd

Chris Bradley, a coauthor of Strategy Beyond the Hockey Stick , 8 Chris Bradley, Marin Hirt, and Sven Smit, Strategy Beyond the Hockey Stick: People, Probabilities, and Big Moves to Beat the Odds , Hoboken, NJ: Wiley, 2018. observed that “it’s a mistake to think that on your team you have the smartest people in the room. They aren’t there. They’re invariably somewhere else.” 9 For more from Chris Bradley, in a conversation with Rob McLean, see “ Want better strategies? Become a bulletproof problem solver ,” August 2019. Nor do they need to be there if you can access their intelligence via other means. In an ever-changing world where conditions can evolve unpredictably, crowdsourcing invites the smartest people in the world to work with you. For example, in seeking a machine-learning algorithm to identify fish catch species and quantities on fishing boats, the Nature Conservancy (TNC) turned to Kaggle and offered a $150,000 prize for the best algorithm. This offer attracted 2,293 teams from all over the world. TNC now uses the winning algorithm to identify fish types and sizes caught on fishing boats in Asia to protect endangered Pacific tuna and other species.

Crowdsourced problem solving is familiar in another guise: benchmarking. When Sir Rod Carnegie was CEO of Conzinc Riotinto Australia (CRA), he was concerned about the costs of unscheduled downtime with heavy trucks, particularly those requiring tire changes. He asked his management team who was best in the world at changing tires; their answer was Formula One, the auto racing competition. A team traveled to the United Kingdom to learn best practice for tire changes in racetrack pits and then implemented what it learned thousands of miles away, in the Pilbara region of Western Australia. The smartest team for this problem wasn’t in the mining industry at all.

Of course, while crowdsourcing can be useful when conventional thinking yields solutions that are too expensive or incomplete for the challenge at hand, it has its limitations. Good crowdsourcing takes time to set up, can be expensive, and may signal to your competitors what you are up to. Beware of hidden costs, such as inadvertently divulging information and having to sieve through huge volumes of irrelevant, inferior suggestions to find the rare gem of a solution.

Accept that it’s OK to draw on diverse experiences and expertise other than your own. Start with brainstorming sessions that engage people from outside your team. Try broader crowdsourcing competitions to generate ideas. Or bring in deep-learning talent to see what insights exist in your data that conventional approaches haven’t brought to light. The broader the circles of information you access, the more likely it is that your solutions will be novel and creative.

Rookie problem solvers show you their analytic process and math to convince you they are clever. Seasoned problem solvers show you differently.

6. Show and tell to drive action

We started our list of mindsets with a reference to children, and we return to children now, with “show and tell.” As you no doubt remember—back when you were more curious!—show and tell is an elementary-school activity. It’s not usually associated with problem solving, but it probably piqued your interest. In fact, this approach is critical to problem solving. Show and tell is how you connect your audience with the problem and then use combinations of logic and persuasion to get action.

The show-and-tell mindset aims to bring decision makers into a problem-solving domain you have created. A team from the Nature Conservancy, for instance, was presenting a proposal asking a philanthropic foundation to support the restoration of oyster reefs. Before the presentation, the team brought 17 plastic buckets of water into the boardroom and placed them around the perimeter. When the foundation’s staff members entered the room, they immediately wanted to know what the buckets were for. The team explained that oyster-reef restoration massively improves water quality because each oyster filters 17 buckets of water per day. Fish stocks improve, and oysters can also be harvested to help make the economics work. The decision makers were brought into the problem-solving domain through show and tell. They approved the funding requested and loved the physical dimension of the problem they were part of solving.

Rookie problem solvers show you their analytic process and mathematics to convince you that they are clever. That’s sometimes called APK, the anxious parade of knowledge. But seasoned problem solvers show you differently. The most elegant problem solving is that which makes the solution obvious. The late economist Herb Simon put it this way: “Solving a problem simply means representing it so as to make the solution transparent.” 10 Herbert Simon, The Sciences of the Artificial , Cambridge, MA: MIT Press, 1969.

To get better at show and tell, start by being clear about the action that should flow from your problem solving and findings: the governing idea for change. Then find a way to present your logic visually so that the path to answers can be debated and embraced. Present the argument emotionally as well as logically, and show why the preferred action offers an attractive balance between risks and rewards. But don’t stop there. Spell out the risks of inaction, which often have a higher cost than imperfect actions have.

The mindsets of great problem solvers are just as important as the methods they employ. A mindset that encourages curiosity, embraces imperfection, rewards a dragonfly-eye view of the problem, creates new data from experiments and collective intelligence, and drives action through compelling show-and-tell storytelling creates radical new possibilities under high levels of unpredictability. Of course, these approaches can be helpful in a broad range of circumstances, but in times of massive uncertainty, they are essential.

Charles Conn is an alumnus of McKinsey’s Sydney office and is a board member of Patagonia and former CEO of the Rhodes Trust. Robert McLean is an alumnus of the Sydney office and is the advisory-board chair of the Nature Conservancy Australia. They are the authors of Bulletproof Problem Solving: The One Skill That Changes Everything (Wiley, 2018).

This article was edited by David Schwartz, an executive editor in the Tel Aviv office.

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Nine Steps to Effective Business Problem Solving

Creating a startup, or managing any business, is all about problem solving. Some people are good at it and some are not – independent of their IQ or their academic credentials (there may even be an inverse relationship here). Yet I’m convinced that problem solving is a learnable trait, rather than just a birthright.

Entrepreneurs who are great problem solvers within any business are the best prepared to solve their customers’ needs effectively as well. In fact, every business is about solutions to customer problems – no problems, no business. Problems are an everyday part of every business and personal environment.

Thus it behooves all of us work on mastering the discipline of problem solving. Here is a formula from Brian Tracy, in his book “ The Power of Self-Discipline ” that I believe will help entrepreneurs move up a notch in this category:

Take the time to define the problem clearly. Many executives like to jump into solution mode immediately, even before they understand the issue. In some cases, a small problem can become a big one with inappropriate actions. In all cases, real clarity will expedite the path ahead.

Pursue alternate paths on “facts of life” and opportunities. Remember, there are some things that you can do nothing about. They’re not problems; they are merely facts of life. Often, what appears to be a problem is actually an opportunity in disguise.

Challenge the definition from all angles. Beware of any problem for which there is only one definition. The more ways you can define a problem, the more likely it is that you will find the best solution. For example, “sales are too low” may mean strong competitors, ineffective advertising, or a poor sales process.

Iteratively question the cause of the problem. This is all about finding the root cause, rather than treating a symptom. If you don’t get to the root, the problem will likely recur, perhaps with different symptoms. Don’t waste time re-solving the same problem.

Identify multiple possible solutions. The more possible solutions you develop, the more likely you will come up with the right one. The quality of the solution seems to be in direct proportion to the quantity of solutions considered in problem solving.

Prioritize potential solutions. An acceptable solution, doable now, is usually superior to an excellent solution with higher complexity, longer timeframe, and higher cost. There is a rule that says that every large problem was once a small problem that could have been solved easily at that time.

Make a decision. Select a solution, any solution, and then decide on a course of action. The longer you put off deciding on what to do, the higher the cost, and the larger the impact. Your objective should be to deal with 80% of all problems immediately. At the very least, set a specific deadline for making a decision and stick to it.

Assign responsibility. Who exactly is going to carry out the solution or the different elements of the solution? Otherwise nothing will happen, and you have no recourse but to implement all solutions yourself.

Set a measure for the solution. Otherwise you will have no way of knowing when and whether the problem was solved. Problem solutions in a complex system often have unintended side effects which can be worse than the original problem.

People who are good at problem solving are some of the most valuable and respected people in every area. In fact, success if often defined as “the ability to solve problems.” In many cultures, this is called “street smarts,” and it’s valued even more than “book smarts.” The best entrepreneurs have both.

Marty Zwilling

What Is Problem Solving in Business?

Problem-solving in business is defined as implementing processes that reduce or remove obstacles that are preventing you or others from accomplishing operational and strategic business goals.

In business, a problem is a situation that creates a gap between the desired and actual outcomes. In addition, a true problem typically does not have an immediately obvious resolution.

Business problem-solving works best when it is approached through a consistent system in which individuals:

Why Problem Solving Is Important in Business

Understanding the importance of problem-solving skills in the workplace will help you develop as a leader. Problem-solving skills will help you resolve critical issues and conflicts that you come across. Problem-solving is a valued skill in the workplace because it allows you to:

How to Solve Business Problems Effectively

There are many different problem-solving skills, but most can be broken into general steps. Here is a four-step method for business problem solving:

1) Identify the Details of the Problem: Gather enough information to accurately define the problem. This can include data on procedures being used, employee actions, relevant workplace rules, and so on. Write down the specific outcome that is needed, but don’t assume what the solution should be.

2) Creatively Brainstorm Solutions: Alone or with a team, state every solution you can think of. You’ll often need to write them down. To get more solutions, brainstorm with the employees who have the greatest knowledge of the issue.

3) Evaluate Solutions and Make a Decision: Compare and contrast alternative solutions based on the feasibility of each one, including the resources needed to implement it and the return on investment of each one. Finally, make a firm decision on one solution that clearly addresses the root cause of the problem.

4) Take Action: Write up a detailed plan for implementing the solution, get the necessary approvals, and put it into action.

What Are Problem-Solving Skills?

Problem-solving skills are specific procedures that can be used to complete one or more of the four general steps of problem-solving (discussed above). Here are five important examples:

Using Emotional Intelligence: You’ll solve problems more calmly when you learn to recognize your own emotional patterns and to empathize with and guide the emotions of others. Avoid knee-jerk responses and making assumptions.

Researching Problems: An effective solution requires an accurate description of the problem. Define simple problems using quick research methods such as asking, “What? Where? When? and How much?.” Difficult problems require more in-depth research, such as data exploration, surveys, and interviews.

Creative Brainstorming: When brainstorming with a group, encourage idea creation by listening attentively to everyone, and recognizing everyone’s unique contributions.

Logical Reasoning: Develop standard logical steps for analyzing possible solutions to problems. Study and apply ideas about logical fallacies, deductive reasoning, and other areas of analytical thought.

Decisiveness: Use an agreed-upon system for choosing a solution, which can include assigning pros and cons to solutions, identifying mandatory results, getting feedback about solutions, choosing the decision-maker(s), and finishing or repeating the process.

How to Improve Problem-Solving Skills

Learning how to solve business problems takes time and effort. Though some people appear to have been born with superior problem-solving skills, great problem solvers usually have practiced and refined their abilities. You can develop high-level skills for solving problems too, through the following methods:

Ask and Listen: Don’t expect to solve every problem alone. Ask for advice, and listen to it carefully.

Practice Curiosity: Any time you’re involved in solving a problem, practice researching and defining the problem just a little longer than you would naturally.

Break Down Problems: Whenever possible, break large problems into their smallest units. Then, search for solutions to one unit at a time.

Don’t Label Yourself Negatively: Don’t allow a problem to mean something negative about you personally. Separate yourself from it. Look at it objectively and be part of the solution.

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7 Steps to Effective Business Problem Solving

Lidia Hovhan SEO Analyst

In the world of business, one piece of advice you can probably abide by is to expect the unexpected.

7 Steps to Effective Business Problem Solving

Whatever the size of your business, you need to have a contingency plan for when problems arise since they are a part of every organization.

Regardless of how well you forecast, plan and test, challenges will always emerge in business. Having the right problem-solving plan can go a long way in ensuring you continue to function even amid unexpected and difficult circumstances.

What is problem-solving in business?

Problem-solving refers to the process to remove or mitigate obstacles that prevent a business from reaching its strategic goals. These can be issues that widen the gap between results and desired outcomes that do not have an obvious or immediate solution. They can be present in operational processes, teams or throughout an organization.

For instance, if the main problem a business is facing is productivity from remote employees, ensuring you equip them with the right work from home essentials by Omnicore can positively impact their productivity.

To be able to approach problem solving effectively, an organization should establish processes that can help in evaluating them, exploring the solutions, prioritizing execution and measuring success.

Why is it so important?

Acquiring problem-solving skills makes it easier for a team to tackle critical business issues or conflicts as they arise. This is a process that needs to be initiated by the management. A CEO or business owner should possess level-headed problem-solving skills to be mirrored by the employees.

With effective problem-solving techniques, the company and staff are better placed to deal with issues more effectively and even establish and refine how they deal with challenges in the future. A business can turn obstacles into opportunities with the right skills while keeping a level head.

In many ways, a problem-solving strategy should mirror how a business reviews performance through regular plan reviews. This calls for working through documentation, finding gaps, digging to find root causes and discussing possible options. Without such a process, problem solving cannot be effective or efficient.

Here are 7 steps you can take to create an effective problem-solving strategy.

1. Define the problem clearly

Whenever a problem crops up, it requires evaluating instead of jumping right into creating the solution. Failing to define and evaluate the root cause of the problem leads to the development of a strategy that will not work, as this is equal to just treating the symptoms.

For instance, when the sales numbers from a new customer start dropping, most businesses will rush into creating a marketing master plan to increase brand exposure as a way of driving up sales. While this may work in the short term, it does not solve the root cause of the drop in sales.

Defining the problem ensures you don’t miss the root cause of the symptoms. To do this, you need to look at it from different angles.

2. Think about multiple possible solutions

The success of any problem-solving process is dependent on how well a business can design a solution. The design thinking approach is one of the most used strategies for problem-solving since it helps to see the issue from different perspectives, leading to creating different possible solutions.

For this to be possible, the business needs to involve a wide array of people in the problem-solving process.

3. Conduct a S.W.O.T analysis

A S.W.O.T analysis is an excellent way or any business to have a look at its strengths and weaknesses. For instance, the launch of a groundbreaking product may be a strength, but the low margins can be the weakness.

In a S.W.O.T analysis, a business will need to document all its external opportunities as well as strengths. This analysis is conducted to make it easier for an organization to become more self-aware. It is a strategic planning tool that helps you identify problems before they affect the business. This makes it easier for the organization to develop solutions before the problem actually arises.

4. Gather input from mentors and the team

When conducting analysis, it’s ideal to seek input from your team to get valued ideas, concerns and opinions on the issues the business is facing. The feedback you get from your mentors, and the team can make your moves more efficient and faster in your problem-solving agenda.

Bringing in your team ensures you use their experiences and expertise in your business to dig deeper and navigate all underlying issues that may have caused the problems you are experiencing. You can also use their ideas and input to craft possible solutions.

If you are a solo entrepreneur, you can benefit from gathering input from your mentors. It’s also advisable to connect with trusted business advisors to get a different view of your issues.

Having greater diversity amongst the people you bring into the problem-solving process can improve your chances of coming up with effective long-term solutions.

5. Prioritize potential solutions

When you allow different people to help you come up with different solutions for your problem, you increase the chances of having multiple possible solutions to a common business problem. With all the options you have, you can evaluate each solution's pros and cons and prioritize the best options in the list.

Always remember that no solution is foolproof. Taking time to go through possible solutions while evaluating their pros and cons increases your chances of implementing the best option of them all.

6. Make a decision

To be able to solve a business problem effectively, you need to decide on the solution to implement. The decision-making process involves settling on the right course of action and should be done as soon as possible to avoid further losses. Taking too long to make a decision only gives the problem more time to impact your business negatively.

Once you have possible, reliable solutions, you need to ensure you implement the solution immediately by choosing a solution and sticking to it.

7. Track progress

The only way to know whether you have successfully solved a problem is by keeping track of the implemented solution. This can be achieved by defining what successful problem-solving looks like and determining how the solution should impact your business.

Some of the questions you can ask when tracking progress include:

The best way to track your progress is by identifying key metrics to track. For instance, you can choose to track your profit margins after implementing a solution. You can tell whether a solution is working by constantly setting and hitting milestones. It’s also important to keep an eye on other business metrics to ensure the solution does not bring rise to other problems. Keeping an eye on the progress will ensure you remain a step ahead of future challenges.

Don’t be afraid of going back to the drawing board to perfect your solution if you identify loopholes that require improvement. Problem solving is a continuous process.

The bottom line

When you are good at problem-solving, you become more valuable in your business, thus setting yourself up for more success. The simple steps highlighted above can make you a more efficient and effective problem solver for your business. Taking time to practice the steps and develop the skills makes the process more natural to you, making future problem solving a breeze.

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Lidia Hovhan

SEO Analyst

https://www.omnicoreagency.com/

Lidia is part of the Content and Marketing team at OmnicoreAgency . She contributes articles about how to integrate digital marketing strategy with traditional marketing to help business owners to meet their online goals. You can find professional insights in her writings.

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Are You Solving the Right Problem?

Dwayne Spradlin

Most firms aren’t, and that undermines their innovation efforts.

Reprint: R1209F

The rigor with which a problem is defined is the most important factor in finding a good solution. Many organizations, however, are not proficient at articulating their problems and identifying which ones are crucial to their strategies.

They may even be trying to solve the wrong problems—missing opportunities and wasting resources in the process. The key is to ask the right questions.

The author describes a process that his firm, InnoCentive, has used to help clients define and articulate business, technical, social, and policy challenges and then present them to an online community of more than 250,000 solvers. The four-step process consists of asking a series of questions and using the answers to create a problem statement that will elicit novel ideas from an array of experts.

EnterpriseWorks/VITA, a nonprofit organization, used this process to find a low-cost, lightweight, and convenient product that expands access to clean drinking water in the developing world.

“If I were given one hour to save the planet, I would spend 59 minutes defining the problem and one minute resolving it,” Albert Einstein said.

Those were wise words, but from what I have observed, most organizations don’t heed them when tackling innovation projects. Indeed, when developing new products, processes, or even businesses, most companies aren’t sufficiently rigorous in defining the problems they’re attempting to solve and articulating why those issues are important. Without that rigor, organizations miss opportunities, waste resources, and end up pursuing innovation initiatives that aren’t aligned with their strategies. How many times have you seen a project go down one path only to realize in hindsight that it should have gone down another? How many times have you seen an innovation program deliver a seemingly breakthrough result only to find that it can’t be implemented or it addresses the wrong problem? Many organizations need to become better at asking the right questions so that they tackle the right problems.

I offer here a process for defining problems that any organization can employ on its own. My firm, InnoCentive, has used it to help more than 100 corporations, government agencies, and foundations improve the quality and efficiency of their innovation efforts and, as a result, their overall performance. Through this process, which we call challenge-driven innovation, clients define and articulate their business, technical, social, and policy issues and present them as challenges to a community of more than 250,000 solvers—scientists, engineers, and other experts who hail from 200 countries—on InnoCentive.com, our innovation marketplace. Successful solvers have earned awards of $5,000 to $1 million.

Since our launch, more than 10 years ago, we have managed more than 2,000 problems and solved more than half of them—a much higher proportion than most organizations achieve on their own. Indeed, our success rates have improved dramatically over the years (34% in 2006, 39% in 2009, and 57% in 2011), which is a function of the increasing quality of the questions we pose and of our solver community. Interestingly, even unsolved problems have been tremendously valuable to many clients, allowing them to cancel ill-fated programs much earlier than they otherwise would have and then redeploy their resources.

In our early years, we focused on highly specific technical problems, but we have since expanded, taking on everything from basic R&D and product development to the health and safety of astronauts to banking services in developing countries. We now know that the rigor with which a problem is defined is the most important factor in finding a suitable solution. But we’ve seen that most organizations are not proficient at articulating their problems clearly and concisely. Many have considerable difficulty even identifying which problems are crucial to their missions and strategies.

In fact, many clients have realized while working with us that they may not be tackling the right issues. Consider a company that engages InnoCentive to find a lubricant for its manufacturing machinery. This exchange ensues:

InnoCentive staffer: “Why do you need the lubricant?”

Client’s engineer: “Because we’re now expecting our machinery to do things it was not designed to do, and it needs a particular lubricant to operate.”

InnoCentive staffer: “Why don’t you replace the machinery?”

Client’s engineer: “Because no one makes equipment that exactly fits our needs.”

This raises a deeper question: Does the company need the lubricant, or does it need a new way to make its product? It could be that rethinking the manufacturing process would give the firm a new basis for competitive advantage. (Asking questions until you get to the root cause of a problem draws from the famous Five Whys problem-solving technique developed at Toyota and employed in Six Sigma.)

The Problem-Definition Process

Establish the need for a solution, what is the.

basic need?

desired outcome?

Who stands to

benefit and why?

Justify the need

Is the effort.

aligned with our strategy?

What are the

desired benefits for the company, and how will we measure them?

How will we

ensure that a solution is implemented?

Contextualize the problem

What approaches have, what have others.

internal and external constraints on implementing a solution?

Write the problem statement

Is the problem.

actually many problems?

What requirements must

a solution meet?

Which problem solvers

should we engage?

What information and

language should the problem statement include?

What do solvers

need to submit?

What incentives do

solvers need?

How will solutions

be evaluated and success measured?

The example is like many we’ve seen: Someone in the bowels of the organization is assigned to fix a very specific, near-term problem. But because the firm doesn’t employ a rigorous process for understanding the dimensions of the problem, leaders miss an opportunity to address underlying strategic issues. The situation is exacerbated by what Stefan Thomke and Donald Reinertsen have identified as the fallacy of “The sooner the project is started, the sooner it will be finished.” (See “Six Myths of Product Development,” HBR May 2012.) Organizational teams speed toward a solution, fearing that if they spend too much time defining the problem, their superiors will punish them for taking so long to get to the starting line.

Ironically, that approach is more likely to waste time and money and reduce the odds of success than one that strives at the outset to achieve an in-depth understanding of the problem and its importance to the firm. With this in mind, we developed a four-step process for defining and articulating problems, which we have honed with our clients. It consists of asking a series of questions and using the answers to create a thorough problem statement. This process is important for two reasons. First, it rallies the organization around a shared understanding of the problem, why the firm should tackle it, and the level of resources it should receive. Firms that don’t engage in this process often allocate too few resources to solving major problems or too many to solving low-priority or wrongly defined ones. It’s useful to assign a value to the solution: An organization will be more willing to devote considerable time and resources to an effort that is shown to represent a $100 million market opportunity than to an initiative whose value is much less or is unclear. Second, the process helps an organization cast the widest possible net for potential solutions, giving internal and external experts in disparate fields the information they need to crack the problem.

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HBR’s 10 Must Reads on Nonprofits and the Social Sectors

To illustrate how the process works, we’ll describe an initiative to expand access to clean drinking water undertaken by the nonprofit EnterpriseWorks/VITA, a division of Relief International. EWV’s mission is to foster economic growth and raise the standard of living in developing countries by expanding access to technologies and helping entrepreneurs build sustainable businesses.

The organization chose Jon Naugle, its technical director, as the initiative’s “problem champion.” Individuals in this role should have a deep understanding of the field or domain and be capable program administrators. Because problem champions may also be charged with implementing solutions, a proven leader with the authority, responsibility, and resources to see the project through can be invaluable in this role, particularly for a larger and more strategic undertaking. Naugle, an engineer with more than 25 years of agricultural and rural-development experience in East and West Africa and the Caribbean, fit the bill. He was supported by specialists who understood local market conditions, available materials, and other critical issues related to the delivery of drinking water.

Step 1: Establish the Need for a Solution

The purpose of this step is to articulate the problem in the simplest terms possible: “We are looking for X in order to achieve Z as measured by W.” Such a statement, akin to an elevator pitch, is a call to arms that clarifies the importance of the issue and helps secure resources to address it. This initial framing answers three questions:

What is the basic need?

This is the essential problem, stated clearly and concisely. It is important at this stage to focus on the need that’s at the heart of the problem instead of jumping to a solution. Defining the scope is also important. Clearly, looking for lubricant for a piece of machinery is different from seeking a radically new manufacturing process.

The basic need EWV identified was access to clean drinking water for the estimated 1.1 billion people in the world who lack it. This is a pressing issue even in areas that have plenty of rainfall, because the water is not effectively captured, stored, and distributed.

What is the desired outcome?

Answering this question requires understanding the perspectives of customers and other beneficiaries. (The Five Whys approach can be very helpful.) Again, avoid the temptation to favor a particular solution or approach. This question should be addressed qualitatively and quantitatively whenever possible. A high-level but specific goal, such as “improving fuel efficiency to 100 mpg by 2020,” can be helpful at this stage.

In answering this question, Naugle and his team realized that the outcome had to be more than access to water; the access had to be convenient. Women and children in countries such as Uganda often must walk long distances to fetch water from valleys and then carry it uphill to their villages. The desired outcome EWV defined was to provide water for daily family needs without requiring enormous expenditures of time and energy.

Who stands to benefit and why?

Answering this question compels an organization to identify all potential customers and beneficiaries. It is at this stage that you understand whether, say, you are solving a lubricant problem for the engineer or for the head of manufacturing—whose definitions of success may vary considerably.

If the problem you want to solve is industrywide, it’s crucial to understand why the market has failed to address it.

By pondering this question, EWV came to see that the benefits would accrue to individuals and families as well as to regions and countries. Women would spend less time walking to retrieve water, giving them more time for working in the field or in outside employment that would bring their families needed income. Children would be able to attend school. And over the longer term, regions and countries would benefit from the improved education and productivity of the population.

Step 2: Justify the Need

The purpose of answering the questions in this step is to explain why your organization should attempt to solve the problem.

Is the effort aligned with our strategy?

In other words, will satisfying the need serve the organization’s strategic goals? It is not unusual for an organization to be working on problems that are no longer in sync with its strategy or mission. In that case, the effort (and perhaps the whole initiative) should be reconsidered.

In the case of EWV, simply improving access to clean drinking water wouldn’t be enough; to fit the organization’s mission, the solution should generate economic development and opportunities for local businesses. It needed to involve something that people would buy.

In addition, you should consider whether the problem fits with your firm’s priorities. Since EWV’s other projects included providing access to affordable products such as cookstoves and treadle pumps, the drinking water project was appropriate.

What are the desired benefits for the company, and how will we measure them?

In for-profit companies, the desired benefit could be to reach a revenue target, attain a certain market share, or achieve specific cycle-time improvements. EWV hoped to further its goal of being a recognized leader in helping the world’s poor by transferring technology through the private sector. That benefit would be measured by market impact: How many families are paying for the solution? How is it affecting their lives? Are sales and installation creating jobs? Given the potential benefits, EWV deemed the priority to be high.

How will we ensure that a solution is implemented?

Assume that a solution is found. Someone in the organization must be responsible for carrying it out—whether that means installing a new manufacturing technology, launching a new business, or commercializing a product innovation. That person could be the problem champion, but he or she could also be the manager of an existing division, a cross-functional team, or a new department.

At EWV, Jon Naugle was also put in charge of carrying out the solution. In addition to his technical background, Naugle had a track record of successfully implementing similar projects. For instance, he had served as EWV’s country director in Niger, where he oversaw a component of a World Bank pilot project to promote small-scale private irrigation. His part of the project involved getting the private sector to manufacture treadle pumps and manually drill wells.

It is important at this stage to initiate a high-level conversation in the organization about the resources a solution might require. This can seem premature—after all, you’re still defining the problem, and the field of possible solutions could be very large—but it’s actually not too early to begin exploring what resources your organization is willing and able to devote to evaluating solutions and then implementing the best one. Even at the outset, you may have an inkling that implementing a solution will be much more expensive than others in the organization realize. In that case, it’s important to communicate a rough estimate of the money and people that will be required and to make sure that the organization is willing to continue down this path. The result of such a discussion might be that some constraints on resourcing must be built into the problem statement. Early on in its drinking water project, EWV set a cap on how much it would devote to initial research and the testing of possible solutions.

Now that you have laid out the need for a solution and its importance to the organization, you must define the problem in detail. This involves applying a rigorous method to ensure that you have captured all the information that someone—including people in fields far removed from your industry—might need to solve the problem.

Step 3: Contextualize the Problem

Examining past efforts to find a solution can save time and resources and generate highly innovative thinking. If the problem is industrywide, it’s crucial to understand why the market has failed to address it.

How Well-Defined Problems Lead to Breakthrough Solutions

The subarctic oil problem.

More than 20 years after the 1989 Exxon Valdez oil spill, cleanup teams operating in subarctic waters still struggled because oil became so viscous at low temperatures that it was difficult to pump from barges to onshore collection stations.

How the Problem Was Defined

In its search for a solution, the Oil Spill Recovery Institute framed the problem as one of “materials viscosity” rather than “oil cleanup” and used language that was not specific to the petroleum industry. The goal was to attract novel suggestions from many fields.

A chemist in the cement industry was awarded $20,000 for proposing a modification of commercially available construction equipment that would vibrate the frozen oil, keeping it fluid.

The ALS Research Problem

By the late 2000s, researchers trying to develop a cure or treatment for amyotrophic lateral sclerosis (ALS, or Lou Gehrig’s disease) had not made much progress. One major obstacle was the inability to detect and track the progression of the disease accurately and quickly. Because researchers could not know precisely what stage ALS sufferers had reached, they greatly increased the pool of participants in clinical trials and lengthened their studies, which drove up costs so much that few treatments were developed and evaluated.

Instead of framing its initiative as a search for a cure, Prize4Life, a nonprofit organization, focused on making ALS research feasible and effective. The solution it sought was a biomarker that would enable faster and more-accurate detection and measurement of the progression of the disease.

In 2011, a researcher from Beth Israel Hospital in Boston was paid $1 million for a noninvasive, painless, and low-cost approach, which detects ALS and assesses its progression by measuring changes in an electrical current traveling through muscle. This biomarker lowers the cost of ALS research by providing accurate and timely data that allow researchers to conduct shorter studies with fewer patients.

The Solar Flare Problem

In 2009 NASA decided it needed a better way to forecast solar flares in order to protect astronauts and satellites in space and power grids on Earth. The model it had been using for the past 30 years predicted whether radiation from a solar flare would reach Earth with only a four-hour lead time and no more than 50% accuracy.

NASA did not ask potential solvers simply to find a better way to predict solar flares; instead, it pitched the problem as a data challenge, calling on experts with analytic backgrounds to use one of the agency’s greatest assets—30 years of space weather data—to develop a forecasting model. This data-driven approach not only invited solvers from various fields but also enabled NASA to provide instant feedback, using its archived data, on the accuracy of proposed models.

A semiretired radio-frequency engineer living in rural New Hampshire used data analysis and original predictive algorithms to develop a forecasting model that provided an eight-hour lead time and 85% accuracy. He was awarded $30,000 for this solution.

What approaches have we tried?

The aim here is to find solutions that might already exist in your organization and identify those that it has disproved. By answering this question, you can avoid reinventing the wheel or going down a dead end.

In previous efforts to expand access to clean water, EWV had offered products and services ranging from manually drilled wells for irrigation to filters for household water treatment. As with all its projects, EWV identified products that low-income consumers could afford and, if possible, that local entrepreneurs could manufacture or service. As Naugle and his team revisited those efforts, they realized that both solutions worked only if a water source, such as surface water or a shallow aquifer, was close to the household. As a result, they decided to focus on rainwater—which falls everywhere in the world to a greater or lesser extent—as a source that could reach many more people. More specifically, the team turned its attention to the concept of rainwater harvesting. “Rainwater is delivered directly to the end user,” Naugle says. “It’s as close as you can get to a piped water system without having a piped water supply.”

What have others tried?

EWV’s investigation of previous attempts at rainwater harvesting involved reviewing research on the topic, conducting five field studies, and surveying 20 countries to ask what technology was being used, what was and was not working, what prevented or encouraged the use of various solutions, how much the solutions cost, and what role government played.

“One of the key things we learned from the surveys,” Naugle says, “was that once you have a hard roof—which many people do—to use as a collection surface, the most expensive thing is storage.”

Here was the problem that needed to be solved. EWV found that existing solutions for storing rainwater, such as concrete tanks, were too expensive for low-income families in developing countries, so households were sharing storage tanks. But because no one took ownership of the communal facilities, they often fell into disrepair. Consequently, Naugle and his team homed in on the concept of a low-cost household rainwater-storage device.

Their research into prior solutions surfaced what seemed initially like a promising approach: storing rainwater in a 525-gallon jar that was almost as tall as an adult and three times as wide. In Thailand, they learned, 5 million of those jars had been deployed over five years. After further investigation, however, they found that the jars were made of cement, which was available in Thailand at a low price. More important, the country’s good roads made it possible to manufacture the jars in one location and transport them in trucks around the country. That solution wouldn’t work in areas that had neither cement nor high-quality roads. Indeed, through interviews with villagers in Uganda, EWV found that even empty polyethylene barrels large enough to hold only 50 gallons of water were difficult to carry along a path. It became clear that a viable storage solution had to be light enough to be carried some distance in areas without roads.

What are the internal and external constraints on implementing a solution?

Now that you have a better idea of what you want to accomplish, it’s time to revisit the issue of resources and organizational commitment: Do you have the necessary support for soliciting and then evaluating possible solutions? Are you sure that you can obtain the money and the people to implement the most promising one?

External constraints are just as important to evaluate: Are there issues concerning patents or intellectual-property rights? Are there laws and regulations to be considered? Answering these questions may require consultation with various stakeholders and experts.

Do you have the necessary support for soliciting and evaluating possible solutions? Do you have the money and the people to implement the most promising one?

EWV’s exploration of possible external constraints included examining government policies regarding rainwater storage. Naugle and his team found that the governments of Kenya, Tanzania, Uganda, and Vietnam supported the idea, but the strongest proponent was Uganda’s minister of water and the environment, Maria Mutagamba. Consequently, EWV decided to test the storage solution in Uganda.

Step 4: Write the Problem Statement

Now it’s time to write a full description of the problem you’re seeking to solve and the requirements the solution must meet. The problem statement, which captures all that the organization has learned through answering the questions in the previous steps, helps establish a consensus on what a viable solution would be and what resources would be required to achieve it.

A full, clear description also helps people both inside and outside the organization quickly grasp the issue. This is especially important because solutions to complex problems in an industry or discipline often come from experts in other fields (see “Getting Unusual Suspects to Solve R&D Puzzles,” HBR May 2007). For example, the method for moving viscous oil from spills in Arctic and subarctic waters from collection barges to disposal tanks came from a chemist in the cement industry, who responded to the Oil Spill Recovery Institute’s description of the problem in terms that were precise but not specific to the petroleum industry. Thus the institute was able to solve in a matter of months a challenge that had stumped petroleum engineers for years. (To read the institute’s full problem statement, visit hbr.org/problem-statement1 .)

Here are some questions that can help you develop a thorough problem statement:

Is the problem actually many problems?

The aim here is to drill down to root causes. Complex, seemingly insoluble issues are much more approachable when broken into discrete elements.

For EWV, this meant making it clear that the solution needed to be a storage product that individual households could afford, that was light enough to be easily transported on poor-quality roads or paths, and that could be easily maintained.

What requirements must a solution meet?

EWV conducted extensive on-the-ground surveys with potential customers in Uganda to identify the must-have versus the nice-to-have elements of a solution. (See the sidebar “Elements of a Successful Solution.”) It didn’t matter to EWV whether the solution was a new device or an adaptation of an existing one. Likewise, the solution didn’t need to be one that could be mass-produced. That is, it could be something that local small-scale entrepreneurs could manufacture.

Elements of a Successful Solution

EnterpriseWorks/VITA surveyed potential customers in Uganda to develop a list of must-have and nice-to-have elements for a product that would provide access to clean drinking water. The winning solution, shown here in a Ugandan village, met all the criteria.

1. A price, including installation, of no more than $20

2. Storage capacity of at least 125 gallons

3. A weight light enough for one adult to carry a half mile on rough paths

4. Material that would prevent deterioration of water quality

5. An estimate of the cost of operating and maintaining the device over three years and a clear explanation of how to repair and replace components

6. A means, such as a filter, of removing gross organic matter from the incoming rain stream

7. A means, such as a tap or a pump, of extracting water without contaminating the contents of the unit

8. A method for completely draining the water and cleaning the system

Nice-to-Have

1. An aesthetically pleasing design

2. Additional functionality so that the unit could be used for multiple purposes

3. Features such as a modular design or salvageable parts that would add value to the device after its lifetime

Experts in rainwater harvesting told Naugle and his team that their target price of $20 was unachievable, which meant that subsidies would be required. But a subsidized product was against EWV’s strategy and philosophy.

Which problem solvers should we engage?

The dead end EWV hit in seeking a $20 solution from those experts led the organization to conclude that it needed to enlist as many experts outside the field as possible. That is when EWV decided to engage InnoCentive and its network of 250,000 solvers.

What information and language should the problem statement include?

To engage the largest number of solvers from the widest variety of fields, a problem statement must meet the twin goals of being extremely specific but not unnecessarily technical. It shouldn’t contain industry or discipline jargon or presuppose knowledge of a particular field. It may (and probably should) include a summary of previous solution attempts and detailed requirements.

With those criteria in mind, Naugle and his team crafted a problem statement. (The following is the abstract; for the full problem statement, visit hbr.org/problem-statement2 .) “EnterpriseWorks is seeking design ideas for a low-cost rainwater storage system that can be installed in households in developing countries. The solution is expected to facilitate access to clean water at a household level, addressing a problem that affects millions of people worldwide who are living in impoverished communities or rural areas where access to clean water is limited. Domestic rainwater harvesting is a proven technology that can be a valuable option for accessing and storing water year round. However, the high cost of available rainwater storage systems makes them well beyond the reach of low-income families to install in their homes. A solution to this problem would not only provide convenient and affordable access to scarce water resources but would also allow families, particularly the women and children who are usually tasked with water collection, to spend less time walking distances to collect water and more time on activities that can bring in income and improve the quality of life.”

To engage the largest number of solvers from the widest variety of fields, a problem statement must meet the twin goals of being extremely specific but not unnecessarily technical.

What do solvers need to submit?

What information about the proposed solution does your organization need in order to invest in it? For example, would a well-founded hypothetical approach be sufficient, or is a full-blown prototype needed? EWV decided that a solver had to submit a written explanation of the solution and detailed drawings.

What incentives do solvers need?

The point of asking this question is to ensure that the right people are motivated to address the problem. For internal solvers, incentives can be written into job descriptions or offered as promotions and bonuses. For external solvers, the incentive might be a cash award. EWV offered to pay $15,000 to the solver who provided the best solution through the InnoCentive network.

How will solutions be evaluated and success measured?

Addressing this question forces a company to be explicit about how it will evaluate the solutions it receives. Clarity and transparency are crucial to arriving at viable solutions and to ensuring that the evaluation process is fair and rigorous. In some cases a “we’ll know it when we see it” approach is reasonable—for example, when a company is looking for a new branding strategy. Most of the time, however, it is a sign that earlier steps in the process have not been approached with sufficient rigor.

EWV stipulated that it would evaluate solutions on their ability to meet the criteria of low cost, high storage capacity, low weight, and easy maintenance. It added that it would prefer designs that were modular (so that the unit would be easier to transport) and adaptable or salvageable or had multiple functions (so that owners could reuse the materials after the product’s lifetime or sell them to others for various applications). The overarching goal was to keep costs low and to help poor families justify the purchase.

Ultimately, the solution to EWV’s rainwater-storage problem came from someone outside the field: a German inventor whose company specialized in the design of tourist submarines. The solution he proposed required no elaborate machinery; in fact, it had no pumps or moving parts. It was an established industrial technology that had not been applied to water storage: a plastic bag within a plastic bag with a tube at the top. The outer bag (made of less-expensive, woven polypropylene) provided the structure’s strength, while the inner bag (made of more-expensive, linear low-density polyethylene) was impermeable and could hold 125 gallons of water. The two-bag approach allowed the inner bag to be thinner, reducing the price of the product, while the outer bag was strong enough to contain a ton and a half of water.

The structure folded into a packet the size of a briefcase and weighed about eight pounds. In short, the solution was affordable, commercially viable, could be easily transported to remote areas, and could be sold and installed by local entrepreneurs. (Retailers make from $4 to $8 per unit, depending on the volume they purchase. Installers of the gutters, downspout, and base earn about $6.)

EWV developed an initial version and tested it in Uganda, where the organization asked end users such questions as What do you think of its weight? Does it meet your needs? Even mundane issues like color came into play: The woven outer bags were white, which women pointed out would immediately look dirty. EWV modified the design on the basis of this input: For example, it changed the color of the device to brown, expanded its size to 350 gallons (while keeping the target price of no more than $20 per 125 gallons of water storage), altered its shape to make it more stable, and replaced the original siphon with an outlet tap.

After 14 months of field testing, EWV rolled out the commercial product in Uganda in March 2011. By the end of May 2012, 50 to 60 shops, village sales agents, and cooperatives were selling the product; more than 80 entrepreneurs had been trained to install it; and 1,418 units had been deployed in eight districts in southwestern Uganda.

EWV deems this a success at this stage in the rollout. It hopes to make the units available in 10 countries—and have tens or hundreds of thousands of units installed—within five years. Ultimately, it believes, millions of units will be in use for a variety of applications, including household drinking water, irrigation, and construction. Interestingly, the main obstacle to getting people to buy the device has been skepticism that something that comes in such a small package (the size of a typical five-gallon jerrican) can hold the equivalent of 70 jerricans. Believing that the remedy is to show villagers the installed product, EWV is currently testing various promotion and marketing programs. As the EWV story illustrates, critically analyzing and clearly articulating a problem can yield highly innovative solutions. Organizations that apply these simple concepts and develop the skills and discipline to ask better questions and define their problems with more rigor can create strategic advantage, unlock truly groundbreaking innovation, and drive better business performance. Asking better questions delivers better results.

DS Dwayne Spradlin is the president and CEO of InnoCentive , an online marketplace that connects organizations with freelance problem solvers in a multitude of fields. He is a coauthor, with Alpheus Bingham, of The Open Innovation Marketplace: Creating Value in the Challenge Driven Enterprise (FT Press, 2011).

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Business problem solving

We all know someone who always seems to have the answer. They’re prepared for any situation and solve problems quickly and decisively. These people are typically great leaders in business and in life. But is business problem solving a natural talent? Or is it a skill you can develop?

The truth is that business problem solving is a set of skills and strategies that anyone can learn – and it’s more important than ever.

With the economy in a winter phase and the nature of work transforming before our eyes, there’s no shortage of business problems to solve in today’s economy. Learning how to solve business problems effectively requires focus, decisiveness and self-awareness.

Discover how to solve business problems effectively

Business problem solving: an essential skill

Whether you’re managing a new company or just starting as CEO at a global enterprise, you’re sure to encounter business problems to solve . Dealing with crises . Employee turnover and unhappiness. Inability to scale mindfully. Financial problems. Leadership gaps. Without creative thinking to solve business problems , these issues can quickly build up and lead to the one thing you certainly don’t want: the close of your business.

Strong leadership and decision-making have the opposite effect: one study even found that extraordinary leaders can double profits at their companies. Business problem solving is an essential skill not only for owners and CEOs, but anyone with entrepreneurial desires or career-climbing dreams.

How to solve business problems effectively

Business problems to solve are easy to come by – the skills needed to make tough choices and act decisively are less common. But with the right strategies, you can develop them and learn how to take your business to the next level .

1. Know where you want to be

Business problem solving always starts with having a plan. If you don’t have goals you’re working toward, you’ll never know when you miss them. The signs of business problems will pass you by.

A traditional business plan isn’t enough, because it only shows you how to get from point A to point B. You need to create a business map – a holistic view of your vision, your mission and all the possible business problems to solve. This map will keep you moving along the route to your ultimate goal: scaling your business and planning an exit strategy .

2. Know where you are

The next step is to get real: be honest about where your business is currently. Look at your financial statements. Survey your employees to get an idea of business problems to solve on the front lines. Ask your colleagues and others in your industry where they are so that you can compare.

It’s important to be realistic at this step. If you have a high risk tolerance , you may be tempted to be overly optimistic. If you’re a perfectionist or have low risk tolerance, you could be more negative than you need to be. Avoid falling in love with your product or your company and make sure you’re taking an objective look at where you are.

3. Identify the problem

In much the same way you ask “What business am I in?” and then “What business am I really in?” you can ask, “What’s the problem?” You’ll likely identify a surface-level answer, like “sales are dropping.” Then ask, “What’s really the problem?” Sales are affected by multiple other business problems to solve , from recruiting top salespeople to providing excellent customer service .

Business problem solving often goes back to the customer. You must provide them with more value than anyone else, through your product and your customer experience. If you’re having trouble identifying your business problem, start with these areas.

4. Understand the problem

It’s tempting to jump right to solutions once you’ve identified the problem. But pulling weeds out by the top is never effective. You need to get to the root of the issue. When was the last time you did a competitive analysis or surveyed your customers for feedback?

It isn’t enough to perform a typical SWOT analysis and leave it at that. Creative thinking to solve business problems starts with listening . When you listen, you’ll receive data – the opinions of customers, the strategies of competitors. That data will tell a story. Only when you uncover this story will you be able to pull the weed out by the root.

5. Focus on solutions

Tony tells us to “Identify your problems, but give your power and energy to solutions.” Now is the time for solutions – but you can’t do it alone. Get together with your team or your colleagues and brainstorm. Ask the right questions so that you get honest, productive answers. Model various scenarios and rank them based on their outcomes. Apply a framework like the Rapid Planning Method to help you.

Get a second opinion from your mentor or a group of trusted advisors outside of your company. Sign up for business coaching to run your questions by an expert. Narrow down your options until you’re confident you’ve come to the right solution. Then create a massive action plan and put your business problem-solving skills to use.

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4 Proven Techniques For Effective Business Problem Solving

There are several fundamentals on which your business stands, remains stable, and soars at the heights for you. These fundamentals are Research and Development of your product and services , Marketing along with market analysis and implementations, sales, accounts, customer support, and human resources. These fundamentals remain the same regardless of the size of your company.

Ideally, for your company to run smoothly, all the fundamentals must remain in balance. However, more often than not, the real scenario is far away from the ideal. As problems arise every day, your business needs new optimizations every day. And it is within these problems that you will actually find the job of having a business.

In any way, it is very important for you to look at your operations and make them as error-free as possible. But, how to do that? Well, this is what this blog post is all about- Actionable steps to business problem-solving.

So Firstly You Have to Determine What Is the Actual Problem?

Running a company is not easy. Hundreds of things come at you from all different directions. In that case, a lot of time, you might not even realize that there is any problem. So when you see that everything is not the way it is supposed to be. Find out the actual problem.

There could be a problem in any of the fundamental aspects that we discussed above. Moreover, A lot of times, it is possible to have problems in multiple areas of business. And knowing the area of the problem is the first and most important step toward solving the problem.

And then, understand the seriousness of the problem?

At times, the problem at hand requires a solution. But you might not need to act on it immediately. It is so much like a dent in your ship. But other times, the problems might thrash right under your ship. And it becomes so severe that you need to work on it immediately. If not, the problem might just sink your entire business.

Some of such severe problems include not having adequate funds , improper marketing , and sales strategy, not enough human resources, shortage of technology, improper leadership, and more.

However, at the end of the day, you get to decide on the severity of the problem.

Apply proper damage control

Once you figure out the seriousness of the problem, think about what you can do immediately. A few problems may not have an instant solution. But they can definitely have instant damage control. So, by the time you reach the root of your problem and bring the solution, apply the appropriate damage control.

And solve problem from the very root

A lot of time, a problem is not just the bits that appear on the surface. In fact, it has a deeper end than we could think of. So, every time you find a problem, give it an analytical approach. Give it a helicopter view and find out the factors contributing to your problem. Doing so will help you solve the problem from its deepest point. And along with that, will also help you streamline other operations affecting it.

To Know the Problem From Its Root Cause, Here Are a Few Techniques You Can Implement.

Techniques For Effective Business Problem Solving

Apply SWOT analysis

SWOT analysis stands for Strength, Weakness, Opportunities, and Threat. A lot of times, companies use this model for competitive analysis . But it can also give you insights into the operations and management of your company. It helps you figure out the strong points and wear points of every operation of all the departments.

Conduct Market Research

You surely pay a lot of your time and efforts to make your operations smooth. But a lot of the time, your problem is outside your office. That’s because the market keeps changing all the time. The reason for the change could be anything including competitors, the change in demand and supply, recession or economic boom, or anything!

The market is unpredictable and it can change at any moment. Sometimes the change is obvious and sometimes it is out of the blue. But even with the most minute change can shake the very fundamentals of your business.

In that case, you need to keep conducting market research and analysis. So you can steer the growth of your company strategically. And along with that, it will also help you to identify the problem and solve it.

Refer Case Studies

A lot of companies like to document their previous problems and their solutions. And it is not a bad idea. But it can also be overwhelming and hence, most companies do not prefer to do it. But there are a lot of business journals online and offline that document some of the most challenging problems and breakthroughs.

In fact, there are different journals and magazines for different areas of business. And being a business person, it is always a good idea to catch up with those journals and magazines.

It gives you a different perspective on the problems that you have at hand. Moreover, it might even encourage you to do things differently to avoid certain problems. Moreover, it is always good to be informed about the business world in general.

Discuss with your team and mentors

While it is true that a team of like-minded people helps you smooth your office operations. But sometimes, it takes the differences that make you look for your solutions differently. And that’s how your teammates can help you out. And usually, mentors are more experienced.

They have generally seen the more perplexing scenario in the business and in the market. And you could surely rely on their judgment to solve problems. The goal is to solve your problems quickly and efficiently.

And if taking advice from your teammates, peers and mentors can accelerate the process then you must always consider it.

Be creative

No matter the problem or situation, it is always a good idea to think out of the box. It not only forces you to have unique solutions. But also, puts you in distinct positions which you can leverage to take your business to new heights. Along with that, you also find ways to optimize your finances and resources. After all, problem-solving in business is all about creativity and implementation.

And while you make a point to look at the solutions creatively, make sure you have more than one approach to it. This way will have multiple backs up plans if you get stuck.

Track the progress

All your thoughtful, well-discussed, creative solutions won’t be enough if you do not analyze and optimize them. So, when you come up with solutions, make sustainable plans to analyze them.

While following the above-mentioned steps,

There Are Four Effective Problem Solving Techniques That You Can Use:

Six Thinking Hats

Six Thinking Hats focuses on identifying the problems and their solutions from different perspectives. It involves consulting with team members from different departments and ranks. And that’s how you get a complete overview of the situations and their solutions. It involves data research and analysis as well as creative brainstorming.

This problem-solving technique opens space for different ideas and removes roadblocks from a solution.

Lightning Decision Jam

Lightning Decision Jam is one of the most important problem-solving strategies. The problem-solving process requires more of a creative upfront. It does not only set things right but allows you to have fun along the way.

In this problem-solving technique, you invite a few qualified people from your team and discuss a certain problem. These people put their problems and their probable solutions on a sheet of paper without any discussion. One by one, they present it to the host and discuss it collectively.

After which the priority of the solution is then decided by a collective vote and the solution is put into execution accordingly. The best advantages of this technique are:

Hence, the result of the implied solution is seen clearly.

Problem Definition Process

Problems can be complex but when you identify the problem, the solution becomes clear with each step. That’s exactly what you do in this problem-solving technique.

Identify the problem and go to the root cause of it. The particular problem could be affecting many other operations too. Hence, sometimes it is easy and obvious for you to be misled. And other times, you might see the problems that are at the top of the surface.

So, this problem simply involves identifying a problem at a deeper level. You begin by identifying a focus question and exploring the ways in which it manifests before splitting into five teams who will each consider the problem using a different method: escape, reversal, exaggeration, distortion, or wishful thinking. Teams develop problem objective and problem-solving ideas in line with their method before then feeding them back to the group.

This problem-solving technique not only goes as deep as the problem but at the heart of the organization. It aligns with your vision, mission , and your practices to achieve it. It is highly effective in helping a group to find the root cause of any problem or challenge and conduct root cause analysis that will deliver results.

By beginning with the creation of a problem statement and going through five stages to refine it into a root cause problem statement , The 5 Whys provides everything you need to guide a group through a root cause analysis with ease.

World Cafe is a powerful problem-solving technique that directs your team’s attention to solving complex problems. This problem-solving technique enables this approach by creating a relaxed atmosphere. The participants self-organize and explore relevant topics for problem-solving purposes.

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