Problem-Solving in Business: PROBLEM-SOLVING STEPS

*  Get input from people who are affected by the problem

*  Write down opinions and observations of people affected by the problem

*  Consider all potential causes of the problem: competition, business model, market factors, team performance, etc.

*  If needed, conduct a SWOT analysis (Strengths, Weaknesses, Opportunities, Threats)

*  Employ research tools, such as information sources, databases, surveys, and interviews for fact finding, data gathering and analysis, etc.

Example of a SWOT ANALYSIS 

SOURCE: Cisco Systems, Inc. SWOT Analysis; Date: October 26, 2020

Porter's Five Forces

1. Threat of New Entrants (effectively, this is “Barriers to Entry”)
2. Competitive Dynamics
3. Supplier Power
4. Buyer Power
5. Threat of Substitutes

The 3 Cs

1. Company
2. Competitors
3. Customers/clients

The 4 Ps

1. Product
2. Price
3. Placement
4. Promotion

SWOT

1. Strengths
2. Weaknesses
3. Opportunities
4. Threats

SOURCE and for additional information on analysis frameworks and more, please go to: STREETOFWALLS

Postpone the selection of one solution until several problem-solving alternatives have been proposed. Considering multiple alternatives can significantly enhance the value of your ideal solution. Once you have decided on the "what should be" model, this target standard becomes the basis for developing a road map for investigating alternatives. Brainstorming and team problem-solving techniques are both useful tools in this stage of problem solving.

Many alternative solutions to the problem should be generated before final evaluation. A common mistake in problem solving is that alternatives are evaluated as they are proposed, so the first acceptable solution is chosen, even if it’s not the best fit. If we focus on trying to get the results we want, we miss the potential for learning something new that will allow for real improvement in the problem-solving process.

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Characteristics of Good Alternatives

Value-Focused --  meaning that they are explicitly designed to address the fundamental values or ends of the decision – the “things that matter” or “felt needs”, as defined by the objectives and the evaluation criteria;

Technically Sound --  meaning that in developing alternatives for achieving the objectives, the project team has drawn on the best available information about cause and effect relationships and has designed creative and diverse alternatives based on sound analysis;

Clearly and Consistently Defined -- meaning that all alternatives are defined to a sufficient and consistent level of detail using logically consistent assumptions, and that a base case against which all alternatives can be compared has been clearly established;

Small in number and high in quality --  meaning that poor (dominated) alternatives have been eliminated and those remaining have been iteratively refined to incorporate new ideas and joint gains;

Comprehensive and mutually exclusive --  meaning that individual elements or components of a strategy are combined into complete packages, and that the packages are directly comparable;

Able to expose fundamental trade-offs --  meaning that they emphasize rather than hide difficult but unavoidable value-based trade-offs and present real choices for decision makers;

Developed collaboratively with the people most affected --   because difficult trade-offs are easier to make and to accept when people believe that a thorough search for good alternatives has been conducted and that the best alternatives are on the table.

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THE KEY QUESTIONS TO ASK BEFORE DECIDING ON A SOLUTION TO IMPLEMENT

• Does the solution meet Customers’ Requirements?

• Is it aligned to the  Business Strategy / Mission and Values /

• What Impact will this have on the business now ?

• What Potential Impact  will the solution have in the future ?

• What Business Benefit does the solution bring?   – This is one where you need to strike a balance between tangible and non-tangible ideas in order to get everybody on board. The difference between these categories are that tangible ideas will lead to a financial improvement whilst non-tangible suggestions contain a non-monetary aspect. But this doesn’t mean they are not important, as often this intrinsically contributes a lot to the well-feeling and being of employees.

• Does the solution directly impact one of the KPI’s ?

• How much Time will it take to implement solution ?

• What is the Urgency in implementing this solution ?

• What Investment and resources are required? / How much will the solution Cost ?

• What is the Payback (in years) for this investment ?

• What is the Value of the solution ?

• What Authority will be needed to approve the solution ?

• How Complex is the solution ?

It goes without saying that some of these questions may not be applicable to every type of solution you’re considering and should be therefore be used as a generic guide.

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How will you know your problem is solved? And not just the symptom -- how will you know when you've addressed the underlying issues? Before you dive into enacting the solution, make sure you know what success looks like.

Decide on a few key performance indicators. Take a baseline measurement, and set a goal and a timeframe. You're essentially translating your solution into a plan, complete with milestones and goals. Without these, you've simply made a blind decision, with no way to track success. You need those goals and milestones to make your plan real.

The key to effective problem-solving in business is the ability to adapt. You can waste a lot of resources on staying the wrong course for too long. So make a plan to reduce your risk now. Think about what you'd do if you were faced with a problem large enough to sink your business. Be as proactive as you be.

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10 CRITERIA TO CONSIDER WHEN DESIGNING 

KEY PERFORMANCE MEASURES

Consider this list of criteria when building out your key business performance measurement systems:

1. Be based on quantities that can be influenced, or controlled, by the user alone or in cooperation with others
2. Be objective and not based on opinion
3. Be derived from strategy and focus on improvement
4. Be clearly defined and simple to understand
5. Be relevant with an explicit purpose
6. Be consistent (in that they maintain their significance as time goes by)
7. Be specific and relate to specific goals/targets
8. Be precise – be exact about what is being measured
9. Provide timely and accurate feedback
10. Reflect the “business process” – i.e. both the supplier and customer should be involved in the definition of the measure

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 "When you first start off trying to solve a problem, the first solutions you come up with are very complex, and most people stop there. But if you keep going, and live with the problem and peel more layers of the onion off, you can often times arrive at some very elegant and simple solutions."  -- Steve Jobs

SUCCESSFUL

• Solves the problem effectively --  The solution achieves the stated goals, meets a need well.
• Has acceptable trade-offs -- Negative side effects (collateral damage in a military operation, side effects of a medication, hostile customer reaction, high electrical consumption) must also be factored in.
• Meets constraints -- The solution works within the stated constraints to the problem (or overcomes or circumvents them in some acceptable way).
• Acceptable to users -- The solution is agreeable to those who must implement it, to society, to those affected by it. It is not "technologically brilliant but sociologically stupid."

EFFICIENT 

• Good cost/benefit ratio -- The solution is economical, with high price/performance ratio.
• Practical -- The solution is logical, useful, systematic, understandable, "do-able," not overly difficult or complex for the intended benefits. It is as simple and direct as possible for the desired outcome.
• Reliable --The solution will continue to work over time with a high degree of reliability, consistency, and effectiveness.

NEW

• Original -- The solution is innovative, breaking new ground.
• Surprising -- The solution is unusual, out of the ordinary lines of thought. It might appear obvious in hindsight, but the really creative solution is nearly always surprising at first encounter.
• Seminal -- The solution provides the foundation for further, similar solutions, opens new vistas for further development. It represents a beginning--a new line of inquiry--with the promise of a future

COHERENT

• Unified -- The solution is organized, seamless, synthetic, organic, holistic, competent.
• Refined -- The solution is synergetic, high quality, good, well-designed, well-crafted, well-executed.
• Esthetic -- The solution is artistic, attractive, beautiful, enduring, timeless, likable.

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