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MindManager Blog

What is problem-solving? And why is it important in the workplace?

September 28, 2023 by MindManager Blog

If there’s one thing you can count on as a business professional, it’s that you’ll never run short of new problems to solve. Thankfully, whether it includes handling difficult or unexpected situations in the workplace, or resolving complex organizational challenges, we all have the capacity to develop our business problem-solving skills.

The best way to get better at tackling problems productively is to start at the beginning. After all, the better you understand what problem-solving is – and the significant role it plays in every organization – the easier you’ll find it to improve on problem-solving skills in the workplace.

Let’s dive in!

What is problem-solving?

Problem-solving refers to the act of find solutions to difficult or complex issues.

A good problem-solving definition might be finding solutions to difficult or complex issues . In practice, however, solving problems in the workplace is a little more immersive than that.

In the workplace, problem-solving includes a variety of tools, resources, and techniques to:

  • Identify what’s not working.
  • Figure out why it’s broken.
  • Determine the best course of action to fix it.

Whether you know them as obstacles, glitches, or setbacks, problems are a part of our everyday lives. The good news is that our brains excel at reasoning out intricate scenarios and making calculations in situations we’ve never experienced before. That means every one of us is hard-wired to be an adept problem-solver.

The trick is to learn how to take that innate ability and apply it in a deliberate and practiced way.

However, one thing is certain: successfully resolving business and workplace issues is essential.

Not only does effective problem-solving create value that encourages growth, it goes hand-in-hand with impactful decision making.

What are the benefits of problem-solving in business?

Practically speaking, problem-solving provides a golden opportunity to improve your processes, products, and systems – especially when you work through those challenges with others.

Learning to face difficulties calmly, and deal with them intentionally, can also:

  • Ramp up your confidence.
  • Increase your resilience.
  • Help you develop valuable critical thinking skills.

Applying problem-solving skills in the face of an obstacle that seems insurmountable trains you to shift your perspective and look at potential hurdles in a different way.

It also gets you used to examining multiple options for dealing with a problem, which can help you feel more confident in the direction you take.

Solving problems as a team

Business problem solving as a team offers an even wider range of benefits since active collaboration tends to make good things happen at both the individual and group level.

For example:

  • Team-based problem-solving is akin to having a built-in sounding board when you explore new approaches and ideas.
  • As each team member’s critical thinking skills evolve, they bring fresh insights to the collective problem-solving process, bearing out the old adage that many heads are better than one.
  • Solving problems as a team also reduces the feeling of personal risk and exposure that’s common when one person is tasked with solving a puzzle. When that same problem is shared, the sense of risk gets dispersed, and individual team members are less likely to feel singled out.

Not only is there less chance of arriving at an unreasonable or biased solution when you problem-solve as a group, team members assigned to carry that solution out will feel more invested in its success.

Examples of problem solving skills in the workplace

Improving on your problem-solving skills helps you make the most of your brain’s natural capacity to analyze and reason things out.

There are dozens of problem-solving skills that play out in the average workplace – all of which can contribute to your ability to correct oversights, resolve conflict , and work around unexpected obstructions.

Here are a few common examples of problem-solving skills in the workplace, and tips on how to improve them.

1. Data gathering

Figuring out the cause of a problem hinges on collecting relevant data. Consulting efficiently with colleagues, conducting online research, and brainstorming with your team are all valuable data gathering skills.

2. Active listening

As opposed to listening in a purely supportive or empathetic way, active listening involves concentrating fully on what the other person is saying so you can understand the content, respond accordingly, and remember what was said later.

3. Troubleshooting

The ability to analyze and troubleshoot a situation with the help of any data and human input you’ve gathered is essential for drilling down into the core of a problem, and scrutinizing potential solutions.

4. Brainstorming

Brainstorming has become synonymous with creative thinking, innovative idea generation, and problem-solving. The more productive your brainstorming sessions, the more likely you and your group are to put together a list of quality, workable solutions.

It’s interesting to note that effective decision making is both a contributor to, and a by-product of, effective problem-solving.

For example, honing your analytical abilities and other problem-solving skills will inevitably help you make better decisions. The more efficient your decision-making process becomes, meanwhile, the better you’ll get at uncovering and acting on the most promising solution to any dilemma.

A simple problem-solving scenario

It’s clear that we can all benefit from getting more comfortable with problem-solving in the workplace.

Examples of situations where your problem-solving skills will come in handy aren’t difficult to find, and might include:

  • Fixing a technical issue for your customer.
  • Improving your student’s test performance.
  • Reducing the theft of your in-store merchandise.
  • Bumping up your marketing reach.

But, here’s the interesting thing. While it’s evident in each of these situations that there’s a problem to be solved, the exact nature of that problem isn’t so obvious.

In the student’s case, for example, you’d need additional input to help you figure out why they’re performing poorly. Only then would you be able to take steps to find the best-fit solution and achieve the desired learning outcome.

Here’s a simple scenario to help demonstrate that idea:

Bringing new customers onboard in a timely manner is an important part of your client relations strategy. Since hiring Alex a few weeks ago, however, your onboarding process has been taking longer than it should and team members are beginning to complain.

While you can see that the problem in this scenario is the fact that your team isn’t meeting their client onboarding goals, the key is to get clear on exactly what’s causing the hold-up.

You could jump to the conclusion that Alex has time management issues and that it’s time to start looking for a replacement. But, since one of the most common mistakes in business problem-solving is attempting to seize on a solution right away, that might cause you to waste time and resources on a remedy that ultimately proves unnecessary, or that doesn’t provide a viable fix.

Instead, it’s time to put your problem-solving skills to work.

Using data gathering and troubleshooting to pinpoint and clarify the bottleneck in your onboarding process – and active listening to interpret the situation from Alex’s perspective – you soon determine that the real cause of the problem is not what you thought.

In truth, an administrative oversight during the hiring process (yet another problem to be solved!) left Alex unaware of, and without access to, the business process map that’s so vital to efficiently onboarding new customers. Once you provide the necessary resources, it doesn’t take Alex long to get up to speed – and your client onboarding process to revert back to the well-oiled machine that it was.

Even with a team of eager problem-solvers by your side, the truth is that it’s often necessary to have the right problem-solving tools in place to achieve your desired results. That’s where versatile mind mapping software can help.

Not only does MindManager® provide a visual framework that fully supports the problem-solving process, it improves comprehension, inspires more creative solutions, and boosts your ability to make the best possible decisions.

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Six problem-solving mindsets for very uncertain times

Great problem solvers are made, not born. That’s what we’ve found after decades of problem solving with leaders across business, nonprofit, and policy sectors. These leaders learn to adopt a particularly open and curious mindset, and adhere to a systematic process for cracking even the most inscrutable problems. They’re terrific problem solvers under any conditions. And when conditions of uncertainty are at their peak, they’re at their brilliant best.

Six mutually reinforcing approaches underly their success: (1) being ever-curious about every element of a problem; (2) being imperfectionists , with a high tolerance for ambiguity; (3) having a “dragonfly eye” view of the world, to see through multiple lenses; (4) pursuing occurrent behavior and experimenting relentlessly; (5) tapping into the collective intelligence , acknowledging that the smartest people are not in the room; and (6) practicing “show and tell” because storytelling begets action (exhibit).

Here’s how they do it.

1. Be ever-curious

As any parent knows, four-year-olds are unceasing askers. Think of the never-ending “whys” that make little children so delightful—and relentless. For the very young, everything is new and wildly uncertain. But they’re on a mission of discovery, and they’re determined to figure things out. And they’re good at it! That high-energy inquisitiveness is why we have high shelves and childproof bottles.

When you face radical uncertainty, remember your four-year-old or channel the four-year-old within you. Relentlessly ask, “Why is this so?” Unfortunately, somewhere between preschool and the boardroom, we tend to stop asking. Our brains make sense of massive numbers of data points by imposing patterns that have worked for us and other humans in the past. That’s why a simple technique, worth employing at the beginning of problem solving, is simply to pause and ask why conditions or assumptions are so until you arrive at the root of the problem. 1 This approach was originally developed by Sakichi Toyoda, the founder of Toyota.

Natural human biases in decision making, including confirmation, availability, and anchoring biases, often cause us to shut down the range of solutions too early. 2 Daniel Kahneman, Thinking, Fast and Slow , New York, NY: Farrar, Straus and Giroux, 2011. Better—and more creative—solutions come from being curious about the broader range of potential answers.

One simple suggestion from author and economist Caroline Webb to generate more curiosity in team problem solving is to put a question mark behind your initial hypotheses or first-cut answers. This small artifice is surprisingly powerful: it tends to encourage multiple solution paths and puts the focus, correctly, on assembling evidence. We also like thesis/antithesis, or red team/blue team, sessions, in which you divide a group into opposing teams that argue against the early answers—typically, more traditional conclusions that are more likely to come from a conventional pattern. Why is this solution better? Why not that one? We’ve found that better results come from embracing uncertainty. Curiosity is the engine of creativity.

We have to be comfortable with estimating probabilities to make good decisions, even when these guesses are imperfect. Unfortunately, we have truckloads of evidence showing that human beings aren’t good intuitive statisticians.

2. Tolerate ambiguity—and stay humble!

When we think of problem solvers, many of us tend to picture a poised and brilliant engineer. We may imagine a mastermind who knows what she’s doing and approaches a problem with purpose. The reality, though, is that most good problem solving has a lot of trial and error; it’s more like the apparent randomness of rugby than the precision of linear programming. We form hypotheses, porpoise into the data, and then surface and refine (or throw out) our initial guess at the answer. This above all requires an embrace of imperfection and a tolerance for ambiguity—and a gambler’s sense of probabilities.

The real world is highly uncertain. Reality unfolds as the complex product of stochastic events and human reactions. The impact of COVID-19 is but one example: we address the health and economic effects of the disease, and their complex interactions, with almost no prior knowledge. We have to be comfortable with estimating probabilities to make good decisions, even when these guesses are imperfect. Unfortunately, we have truckloads of evidence showing that human beings aren’t good intuitive statisticians. Guesses based on gut instinct can be wildly wrong. That’s why one of the keys to operating in uncertain environments is epistemic humility, which Erik Angner defines as “the realization that our knowledge is always provisional and incomplete—and that it might require revision in light of new evidence.” 3 Erik Angner, “Epistemic humility—knowing your limits in a pandemic,” Behavioral Scientist , April 13, 2020, behavioralscientist.org.

Recent research shows that we are better at solving problems when we think in terms of odds rather than certainties. 4 Annie Duke, Thinking in Terms of Bets: Making Smarter Decisions When You Don’t Have All the Facts , New York, NY: Portfolio/Penguin, 2018. For example, when the Australian research body Commonwealth Scientific and Industrial Research Organisation (CSIRO), which owned a core patent on the wireless internet protocol, sought royalties from major companies, it was initially rebuffed. The CSIRO bet that it could go to court to protect its intellectual property because it estimated that it needed only 10 percent odds of success for this to be a good wager, given the legal costs and likely payoff. It improved its odds by picking the weakest of the IP violators and selecting a legal jurisdiction that favored plaintiffs. This probabilistic thinking paid off and eventually led to settlements to CSIRO exceeding $500 million. 5 CSIRO briefing to US Government, December 5, 2006. A tolerance for ambiguity and a willingness to play the odds helped the organization feel its way to a good solution path.

To embrace imperfectionism with epistemic humility, start by challenging solutions that imply certainty. You can do that in the nicest way by asking questions such as “What would we have to believe for this to be true?” This brings to the surface implicit assumptions about probabilities and makes it easier to assess alternatives. When uncertainty is high, see if you can make small moves or acquire information at a reasonable cost to edge out into a solution set. Perfect knowledge is in short supply, particularly for complex business and societal problems. Embracing imperfection can lead to more effective problem solving. It’s practically a must in situations of high uncertainty, such as the beginning of a problem-solving process or during an emergency.

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.

Want better strategies? Become a bulletproof problem solver

Want better strategies? Become a bulletproof problem solver

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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10 Step Process for Effective Business Problem Solving

Posted august 3, 2021 by harriet genever.

Navigate uncertainty by following this 10-step process to develop your problem-solving skills and approach any issue with confidence. 

When you start a small business or launch a startup, the one thing you can count on is the unexpected. No matter how thoroughly you plan, forecast , and test, problems are bound to arise. This is why as an entrepreneur, you need to know how to solve business problems effectively.

What is problem solving in business?

Problem solving in business relates to establishing processes that mitigate or remove obstacles currently preventing you from reaching strategic goals . These are typically complex issues that create a gap between actual results and your desired outcome. They may be present in a single team, operational process, or throughout your entire organization, typically without an immediate or obvious solution. 

To approach problem solving successfully, you need to establish consistent processes that help you evaluate, explore solutions, prioritize execution, and measure success. In many ways, it should be similar to how you review business performance through a monthly plan review . You work through the same documentation, look for gaps, dig deeper to identify the root cause, and hash out options. Without this process, you simply cannot expect to solve problems efficiently or effectively. 

Why problem solving is important for your business

While some would say problem-solving comes naturally, it’s actually a skill you can grow and refine over time. Problem solving skills will help you and your team tackle critical issues and conflicts as they arise. It starts from the top. You as the business owner or CEO needing to display the type of level-headed problem solving that you expect to see from your employees.

Doing so will help you and your staff quickly deal with issues, establish and refine a problem solving process, turn challenges into opportunities, and generally keep a level head. Now, the best business leaders didn’t just find a magic solution to solve their problems, they built processes and leveraged tools to find success. And you can do the same.

By following this 10-step process, you can develop your problem-solving skills and approach any issue that arises with confidence. 

1. Define the problem

When a problem arises, it can be very easy to jump right into creating a solution. However, if you don’t thoroughly examine what led to the problem in the first place, you may create a strategy that doesn’t actually solve it. You may just be treating the symptoms.

For instance, if you realize that your sales from new customers are dropping, your first inclination might be to rush into putting together a marketing plan to increase exposure. But what if decreasing sales are just a symptom of the real problem? 

When you define the problem, you want to be sure you’re not missing the forest for the trees. If you have a large issue on your hands, you’ll want to look at it from several different angles:

Competition 

Is a competitor’s promotion or pricing affecting your sales? Are there new entrants in your market? How are they marketing their product or business?

Business model 

Is your business model sustainable? Is it realistic for how fast you want to grow? Should you explore different pricing or cost strategies?

Market factors

How are world events and the nation’s economy affecting your customers and your sales?

Are there any issues affecting your team? Do they have the tools and resources they need to succeed? 

Goal alignment 

Is everyone on your team working toward the same goal ? Have you communicated your short-term and long-term business goals clearly and often?

There are a lot of ways to approach the issue when you’re facing a serious business problem. The key is to make sure you’re getting a full snapshot of what’s going on so you don’t waste money and resources on band-aid solutions. 

Going back to our example, by looking at every facet of your business, you may discover that you’re spending more on advertising than your competitors already. And instead, there’s a communication gap within your team that’s leading to the mishandling of new customers and therefore lost sales. 

If you jumped into fixing the exposure of your brand, you would have been dumping more money into an area you’re already winning. Potentially leading to greater losses as more and more new customers are dropped due to poor internal communication.

This is why it’s so vital that you explore your blind spots and track the problem to its source.

2. Conduct a SWOT analysis

All good businesses solve some sort of problem for customers. What if your particular business problem is actually an opportunity, or even a strength if considered from a different angle? This is when you’d want to conduct a SWOT analysis to determine if that is in fact the case.

SWOT is a great tool for strategic planning and bringing multiple viewpoints to the table when you’re looking at investing resources to solve a problem. This may even be incorporated in your attempts to identify the source of your problem, as it can quickly outline specific strengths and weaknesses of your business. And then by identifying any potential opportunities or threats, you can utilize your findings to kickstart a solution. 

3. Identify multiple solutions with design thinking

As you approach solving your problem, you may want to consider using the design thinking approach . It’s often used by organizations looking to solve big, community-based problems. One of its strengths is that it requires involving a wide range of people in the problem-solving process. Which leads to multiple perspectives and solutions arising.

This approach—applying your company’s skills and expertise to a problem in the market—is the basis for design thinking.

It’s not about finding the most complex problems to solve, but about finding common needs within the organization and in the real world and coming up with solutions that fit those needs. When you’re solving business problems, this applies in the sense that you’re looking for solutions that address underlying issues—you’re looking at the big picture.

4. Conduct market research and customer outreach

Market research and customer outreach aren’t the sorts of things small business owners and startups can do once and then cross off the list. When you’re facing a roadblock, think back to the last time you did some solid market research or took a deep dive into understanding the competitive landscape .

Market research and the insights you get from customer outreach aren’t a silver bullet. Many companies struggle with what they should do with conflicting data points. But it’s worth struggling through and gathering information that can help you better understand your target market . Plus, your customers can be one of the best sources of criticism. It’s actually a gift if you can avoid taking the negatives personally .

The worst thing you can do when you’re facing challenges is isolating yourself from your customers and ignore your competition. So survey your customers. Put together a competitive matrix . 

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5. Seek input from your team and your mentors

Don’t do your SWOT analysis or design thinking work by yourself. The freedom to express concerns, opinions, and ideas will allow people in an organization to speak up. Their feedback is going to help you move faster and more efficiently. If you have a team in place, bring them into the discussion. You hired them to be experts in their area; use their expertise to navigate and dig deeper into underlying causes of problems and potential solutions.

If you’re running your business solo, at least bring in a trusted mentor. SCORE offers a free business mentorship program if you don’t already have one. It can also be helpful to connect with a strategic business advisor , especially if business financials aren’t your strongest suit.

Quoting Stephen Covey, who said that “strength lies in differences, not in similarities,” speaking to the importance of diversity when it comes to problem-solving in business. The more diverse a team is , the more often innovative solutions to the problems faced by the organization appear.

In fact, it has been found that groups that show greater diversity were better at solving problems than groups made up specifically of highly skilled problem solvers. So whoever you bring in to help you problem-solve, resist the urge to surround yourself with people who already agree with you about everything.

6. Apply lean planning for nimble execution

So you do your SWOT analysis and your design thinking exercise. You come up with a set of strong, data-driven ideas. But implementing them requires you to adjust your budget, or your strategic plan, or even your understanding of your target market.

Are you willing to change course? Can you quickly make adjustments? Well in order to grow, you can’t be afraid to be nimble . 

By adopting the lean business planning method —the process of revising your business strategy regularly—you’ll be able to shift your strategies more fluidly. You don’t want to change course every week, and you don’t want to fall victim to shiny object thinking. But you can strike a balance that allows you to reduce your business’s risk while keeping your team heading in the right direction.

Along the way, you’ll make strategic decisions that don’t pan out the way you hoped. The best thing you can do is test your ideas and iterate often so you’re not wasting money and resources on things that don’t work. That’s Lean Planning .

7. Model different financial scenarios

When you’re trying to solve a serious business problem, one of the best things you can do is build a few different financial forecasts so you can model different scenarios. You might find that the idea that seemed the strongest will take longer than you thought to reverse a negative financial trend. At the very least you’ll have better insight into the financial impact of moving in a different direction.

The real benefit here is looking at different tactical approaches to the same problem. Maybe instead of increasing sales right now, you’re better off in the long run if you adopt a strategy to reduce churn and retain your best customers. You won’t know unless you model a few different scenarios. You can do this by using spreadsheets, and a tool like LivePlan can make it easier and quicker.

8. Watch your cash flow

While you’re working to solve a challenging business problem, pay particular attention to your cash flow and your cash flow forecast . Understanding when your company is at risk of running out of cash in the bank can help you be proactive. It’s a lot easier to get a line of credit while your financials still look good and healthy, than when you’re one pay period away from ruin.

If you’re dealing with a serious issue, it’s easy to start to get tunnel vision. You’ll benefit from maintaining a little breathing room for your business as you figure out what to do next.

9. Use a decision-making framework

Once you’ve gathered all the information you need, generated a number of ideas, and done some financial modeling, you might still feel uncertain. It’s natural—you’re not a fortune-teller. You’re trying to make the best decision you can with the information you have.

This article offers a really useful approach to making decisions. It starts with putting your options into a matrix like this one:

importance of problem solving in business

Use this sort of framework to put everything you’ve learned out on the table. If you’re working with a bigger team, this sort of exercise can also bring the rest of your team to the table so they feel some ownership over the outcome.

10. Identify key metrics to track

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 .

Problem solving skills to improve

As you and your team work through this process, it’s worth keeping in mind specific problem solving skills you should continue to develop. Bolstering your ability, as well as your team, to solve problems effectively will only make this process more useful and efficient. Here are a few key skills to work on.

Emotional intelligence

It can be very easy to make quick, emotional responses in a time of crisis or when discussing something you’re passionate about. To avoid making assumptions and letting your emotions get the best of you, you need to focus on empathizing with others. This involves understanding your own emotional state, reactions and listening carefully to the responses of your team. The more you’re able to listen carefully, the better you’ll be at asking for and taking advice that actually leads to effective problem solving.

Jumping right into a solution can immediately kill the possibility of solving your problem. Just like when you start a business , you need to do the research into what the problem you’re solving actually is. Luckily, you can embed research into your problem solving by holding active reviews of financial performance and team processes. Simply asking “What? Where? When? How?” can lead to more in-depth explorations of potential issues.

The best thing you can do to grow your research abilities is to encourage and practice curiosity. Look at every problem as an opportunity. Something that may be trouble now, but is worth exploring and finding the right solution. You’ll pick up best practices, useful tools and fine-tune your own research process the more you’re willing to explore.

Brainstorming

Creatively brainstorming with your team is somewhat of an art form. There needs to be a willingness to throw everything at the wall and act as if nothing is a bad idea at the start. This style of collaboration encourages participation without fear of rejection. It also helps outline potential solutions outside of your current scope, that you can refine and turn into realistic action.

Work on breaking down problems and try to give everyone in the room a voice. The more input you allow, the greater potential you have for finding the best solution.

Decisiveness

One thing that can drag out acting upon a potential solution, is being indecisive. If you aren’t willing to state when the final cutoff for deliberation is, you simply won’t take steps quickly enough. This is when having a process for problem solving comes in handy, as it purposefully outlines when you should start taking action.

Work on choosing decision-makers, identify necessary results and be prepared to analyze and adjust if necessary. You don’t have to get it right every time, but taking action at the right time, even if it fails, is almost more vital than never taking a step.  

Stemming off failure, you need to learn to be resilient. Again, no one gets it perfect every single time. There are so many factors in play to consider and sometimes even the most well-thought-out solution doesn’t stick. Instead of being down on yourself or your team, look to separate yourself from the problem and continue to think of it as a puzzle worth solving. Every failure is a learning opportunity and it only helps you further refine and eliminate issues in your strategy.

Problem solving is a process

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 can.

Editor’s note: This article was originally published in 2016. It was updated in 2021.

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Harriet Genever

Harriet Genever

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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:

  • Identify and define the problem
  • Prioritize the problem based on size, potential impact, and urgency
  • Complete a root-cause analysis
  • Develop a variety of possible solutions
  • Evaluate possible solutions and decide which is most effective
  • Plan and implement the solution

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:

  • Apply a standard problem-solving system to all challenges
  • Find the root causes of problems
  • Quickly deal with short-term business interruptions
  • Form plans to deal with long-term problems and improve the organization
  • See challenges as opportunities
  • Keep your cool during challenges

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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How to Solve Problems

  • Laura Amico

importance of problem solving in business

To bring the best ideas forward, teams must build psychological safety.

Teams today aren’t just asked to execute tasks: They’re called upon to solve problems. You’d think that many brains working together would mean better solutions, but the reality is that too often problem-solving teams fall victim to inefficiency, conflict, and cautious conclusions. The two charts below will help your team think about how to collaborate better and come up with the best solutions for the thorniest challenges.

  • Laura Amico is a former senior editor at Harvard Business Review.

Partner Center

What is problem solving and why is it important

importance of problem solving in business

By Wayne Stottler , Kepner-Tregoe

  • Problem Solving & Decision Making Over time, developing and refining problem solving skills provides the ability to solve increasingly complex problems Learn More

For over 60 years, Kepner-Tregoe has been helping companies across industries and geographies to develop and mature their problem-solving capabilities through KT’s industry leading approach to training and the implementation of best practice processes. Considering that problem solving is a part of almost every person’s daily life (both at home and in the workplace), it is surprising how often we are asked to explain what problem solving is and why it is important.

Problem solving is at the core of human evolution. It is the methods we use to understand what is happening in our environment, identify things we want to change and then figure out the things that need to be done to create the desired outcome. Problem solving is the source of all new inventions, social and cultural evolution, and the basis for market based economies. It is the basis for continuous improvement, communication and learning.

If this problem-solving thing is so important to daily life, what is it?

Problem-solving is the process of observing what is going on in your environment; identifying things that could be changed or improved; diagnosing why the current state is the way it is and the factors and forces that influence it; developing approaches and alternatives to influence change; making decisions about which alternative to select; taking action to implement the changes; and observing impact of those actions in the environment.

Each step in the problem-solving process employs skills and methods that contribute to the overall effectiveness of influencing change and determine the level of problem complexity that can be addressed. Humans learn how to solve simple problems from a very early age (learning to eat, make coordinated movements and communicate) – and as a person goes through life problem-solving skills are refined, matured and become more sophisticated (enabling them to solve more difficult problems).

Problem-solving is important both to individuals and organizations because it enables us to exert control over our environment.

Fixing things that are broken

Some things wear out and break over time, others are flawed from day-1. Personal and business environments are full of things, activities, interactions and processes that are broken or not operating in the way they are desired to work. Problem-solving gives us a mechanism for identifying these things, figuring out why they are broken and determining a course of action to fix them.

Addressing risk

Humans have learned to identify trends and developed an awareness of cause-and-effect relationships in their environment. These skills not only enable us to fix things when they break but also anticipate what may happen in the future (based on past-experience and current events). Problem-solving can be applied to the anticipated future events and used to enable action in the present to influence the likelihood of the event occurring and/or alter the impact if the event does occur.

Improving performance

Individuals and organizations do not exist in isolation in the environment. There is a complex and ever-changing web of relationships that exist and as a result, the actions of one person will often have either a direct impact on others or an indirect impact by changing the environment dynamics. These interdependencies enable humans to work together to solve more complex problems but they also create a force that requires everyone to continuously improve performance to adapt to improvements by others. Problem-solving helps us understand relationships and implement the changes and improvements needed to compete and survive in a continually changing environment.

Seizing opportunity

Problem solving isn’t just about responding to (and fixing) the environment that exists today. It is also about innovating, creating new things and changing the environment to be more desirable. Problem-solving enables us to identify and exploit opportunities in the environment and exert (some level of) control over the future.

Problem solving skills and the problem-solving process are a critical part of daily life both as individuals and organizations. Developing and refining these skills through training, practice and learning can provide the ability to solve problems more effectively and over time address problems with a greater degree of complexity and difficulty. View KT’s Problem Solving workshop known to be the gold standard for over 60 years.

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Why problem-solving Is Important in Business

Problem-solving is a critical skill in business.

It involves the ability to identify and solve problems efficiently and effectively to move a company forward.

Whether it’s resolving a technical issue, finding a new solution to an age-old problem, or simply making a difficult decision, strong problem-solving skills are essential for the success of any business.

In this blog post, we’ll explore why problem-solving is so important in the business world and how it can help organizations thrive.

The Importance of Problem-Solving in Business

As mentioned in the introduction, problem-solving is a crucial skill in the business world. It allows organizations to identify and address challenges in a timely and effective manner, which is essential for driving progress and growth.

Without strong problem-solving abilities, businesses may struggle to adapt to change and overcome obstacles, ultimately hindering their success.

But the importance of problem-solving goes beyond just overcoming challenges.

It can also help businesses to identify and seize new opportunities, allowing them to stay ahead of the competition and remain innovative.

Whether it’s finding a new market to tap into or developing a more efficient production process, problem-solving skills are key to driving innovation and staying ahead of the curve.

In short, strong problem-solving skills are essential for businesses of all sizes and industries.

They help organizations to overcome challenges, stay adaptable, and identify and seize new opportunities.

In the following sections, we’ll delve deeper into the various ways that problem-solving can benefit businesses and the different techniques and strategies that can be used to tackle problems effectively.

Developing Problem-Solving Skills

Developing strong problem-solving skills is essential for the success of any business, and there are several ways that organizations can help their employees to hone these skills. Some strategies for developing problem-solving skills include:

Providing training and development opportunities

Many organizations offer training programs or workshops specifically designed to help employees develop problem-solving skills. These programs may include simulations, case studies, or hands-on exercises that allow employees to practice and apply their skills.

Encouraging a growth mindset

A growth mindset is a belief that abilities can be developed through effort and learning. By fostering a culture of continuous learning and encouraging employees to embrace challenges and failures as opportunities to grow and improve, businesses can help to develop problem-solving skills.

Encouraging collaboration and open communication

Collaboration and open communication can be key to solving problems effectively. By creating an environment where employees feel comfortable sharing ideas and seeking help, businesses can foster a culture of problem-solving and continuous improvement.

Providing resources and support

Organizations can also support the development of problem-solving skills by providing employees with the resources and support they need to tackle problems. This may include access to data and analytics tools, training materials, or guidance from experienced colleagues.

By implementing these strategies and providing opportunities for employees to practice and develop their problem-solving skills, businesses can build a strong problem-solving culture and equip their teams with the skills they need to drive success.

The Role of Leadership in Problem-Solving

Effective leadership is crucial for driving problem-solving within an organization. Leaders play a key role in setting the tone and culture of a business, and by fostering a culture of problem-solving and continuous improvement, they can help to develop strong problem-solving skills throughout the organization.

Some specific ways that leaders can support problem-solving within their organization include:

Modeling good problem-solving behavior

Leaders can set a good example by demonstrating strong problem-solving skills themselves. This can include taking a proactive approach to identifying and addressing challenges, seeking out new opportunities, and continuously learning and improving.

Encouraging a culture of continuous improvement

Leaders can create an environment that supports problem-solving by encouraging employees to embrace challenges, think creatively, and seek out new opportunities for improvement.

Leaders can also support problem-solving by providing employees with the resources and support they need to tackle problems effectively. This may include access to data and analytics tools, training materials, or guidance from experienced colleagues.

Recognizing and rewarding problem-solving efforts

By recognizing and rewarding employees who demonstrate strong problem-solving skills, leaders can encourage a culture of problem-solving and continuous improvement within the organization.

By taking an active role in fostering a problem-solving culture and providing the resources and support needed to tackle challenges, leaders can help their organizations to thrive and succeed.

The Benefits of Problem-Solving in Business

In addition to helping businesses to overcome challenges and seize opportunities, strong problem-solving skills can bring a range of other benefits to an organization. Some of the key advantages of problem-solving in business include:

Improved decision-making

Problem-solving skills help organizations to make informed and effective decisions. By using structured approaches and analyzing data, businesses can develop a clear understanding of the issues they face and identify the best course of action.

Enhanced adaptability

Problem-solving skills help businesses to stay adaptable and responsive to change. By being able to identify and address challenges quickly and effectively, organizations can better navigate the constantly-evolving business landscape.

Increased productivity

By resolving issues and identifying efficiencies, problem-solving can help businesses to increase productivity and reduce waste. This can lead to cost savings and improved profitability.

Improved customer satisfaction

Strong problem-solving skills can also help businesses to better serve their customers. By being able to identify and address issues promptly and effectively, organizations can improve customer satisfaction and build stronger relationships with their clients.

Enhanced innovation

Problem-solving skills can also drive innovation within an organization. By encouraging employees to think creatively and critically , businesses can identify and seize new opportunities, leading to new products, services, or processes that set them apart from the competition.

Problem-solving is a critical skill in business, with the potential to drive progress, increase productivity, improve customer satisfaction, and drive innovation. By developing strong problem-solving skills and fostering a culture of continuous improvement, organizations can set themselves up for success.

Conclusion: The Vital Role of Problem-Solving in Business

Problem-solving is a vital skill in the business world. It allows organizations to identify and address challenges efficiently and effectively, helping them to overcome obstacles and seize new opportunities.

Strong problem-solving skills also drive innovation and improve decision-making, leading to increased productivity and customer satisfaction.

Developing and fostering a culture of problem-solving is essential for the success of any business.

By providing training and development opportunities, encouraging a growth mindset, and recognizing and rewarding problem-solving efforts, organizations can help their employees to hone their skills and drive progress.

Effective leadership also plays a key role in fostering a culture of problem-solving, providing the resources and support needed to tackle challenges and seize opportunities.

In short, problem-solving is a critical skill for businesses of all sizes and industries. By developing and fostering strong problem-solving abilities, organizations can set themselves up for success and thrive in today’s fast-paced business environment.

Are you good at problem-solving? Find out with our self-assessment!

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Purdue University

Effective Problem-Solving Techniques in Business

A business team discusses a problem in a conference room

January 20, 2023

Purdue Online

Problem solving is an increasingly important soft skill for those in business. The Future of Jobs Survey by the World Economic Forum drives this point home. According to this report, complex problem solving is identified as one of the top 15 skills that will be sought by employers in 2025, along with other soft skills such as analytical thinking, creativity and leadership.

Dr. Amy David , clinical associate professor of management for supply chain and operations management, spoke about business problem-solving methods and how the Purdue University Online MBA program prepares students to be business decision-makers.

Why Are Problem-Solving Skills Essential in Leadership Roles?

Every business will face challenges at some point. Those that are successful will have people in place who can identify and solve problems before the damage is done.

“The business world is constantly changing, and companies need to be able to adapt well in order to produce good results and meet the needs of their customers,” David says. “They also need to keep in mind the triple bottom line of ‘people, profit and planet.’ And these priorities are constantly evolving.”

To that end, David says people in management or leadership need to be able to handle new situations, something that may be outside the scope of their everyday work.

“The name of the game these days is change—and the speed of change—and that means solving new problems on a daily basis,” she says.

The pace of information and technology has also empowered the customer in a new way that provides challenges—or opportunities—for businesses to respond.

“Our customers have a lot more information and a lot more power,” she says. “If you think about somebody having an unhappy experience and tweeting about it, that’s very different from maybe 15 years ago. Back then, if you had a bad experience with a product, you might grumble about it to one or two people.”

David says that this reality changes how quickly organizations need to react and respond to their customers. And taking prompt and decisive action requires solid problem-solving skills.

What Are Some of the Most Effective Problem-Solving Methods?

David says there are a few things to consider when encountering a challenge in business.

“When faced with a problem, are we talking about something that is broad and affects a lot of people? Or is it something that affects a select few? Depending on the issue and situation, you’ll need to use different types of problem-solving strategies,” she says.

Using Techniques

There are a number of techniques that businesses use to problem solve. These can include:

  • Five Whys : This approach is helpful when the problem at hand is clear but the underlying causes are less so. By asking “Why?” five times, the final answer should get at the potential root of the problem and perhaps yield a solution.
  • Gap Analysis : Companies use gap analyses to compare current performance with expected or desired performance, which will help a company determine how to use its resources differently or adjust expectations.
  • Gemba Walk : The name, which is derived from a Japanese word meaning “the real place,” refers to a commonly used technique that allows managers to see what works (and what doesn’t) from the ground up. This is an opportunity for managers to focus on the fundamental elements of the process, identify where the value stream is and determine areas that could use improvement.
  • Porter’s Five Forces : Developed by Harvard Business School professor Michael E. Porter, applying the Five Forces is a way for companies to identify competitors for their business or services, and determine how the organization can adjust to stay ahead of the game.
  • Six Thinking Hats : In his book of the same name, Dr. Edward de Bono details this method that encourages parallel thinking and attempting to solve a problem by trying on different “thinking hats.” Each color hat signifies a different approach that can be utilized in the problem-solving process, ranging from logic to feelings to creativity and beyond. This method allows organizations to view problems from different angles and perspectives.
  • SWOT Analysis : This common strategic planning and management tool helps businesses identify strengths, weaknesses, opportunities and threats (SWOT).

“We have a lot of these different tools,” David says. “Which one to use when is going to be dependent on the problem itself, the level of the stakeholders, the number of different stakeholder groups and so on.”

Each of the techniques outlined above uses the same core steps of problem solving:

  • Identify and define the problem
  • Consider possible solutions
  • Evaluate options
  • Choose the best solution
  • Implement the solution
  • Evaluate the outcome

Data drives a lot of daily decisions in business and beyond. Analytics have also been deployed to problem solve.

“We have specific classes around storytelling with data and how you convince your audience to understand what the data is,” David says. “Your audience has to trust the data, and only then can you use it for real decision-making.”

Data can be a powerful tool for identifying larger trends and making informed decisions when it’s clearly understood and communicated. It’s also vital for performance monitoring and optimization.

How Is Problem Solving Prioritized in Purdue’s Online MBA?

The courses in the Purdue Online MBA program teach problem-solving methods to students, keeping them up to date with the latest techniques and allowing them to apply their knowledge to business-related scenarios.

“I can give you a model or a tool, but most of the time, a real-world situation is going to be a lot messier and more valuable than what we’ve seen in a textbook,” David says. “Asking students to take what they know and apply it to a case where there’s not one single correct answer is a big part of the learning experience.”

Make Your Own Decision to Further Your Career

An online MBA from Purdue University can help advance your career by teaching you problem-solving skills, decision-making strategies and more. Reach out today to learn more about earning an online MBA with Purdue University .

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What Is Creative Problem-Solving & Why Is It Important?

Business team using creative problem-solving

  • 01 Feb 2022

One of the biggest hindrances to innovation is complacency—it can be more comfortable to do what you know than venture into the unknown. Business leaders can overcome this barrier by mobilizing creative team members and providing space to innovate.

There are several tools you can use to encourage creativity in the workplace. Creative problem-solving is one of them, which facilitates the development of innovative solutions to difficult problems.

Here’s an overview of creative problem-solving and why it’s important in business.

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What Is Creative Problem-Solving?

Research is necessary when solving a problem. But there are situations where a problem’s specific cause is difficult to pinpoint. This can occur when there’s not enough time to narrow down the problem’s source or there are differing opinions about its root cause.

In such cases, you can use creative problem-solving , which allows you to explore potential solutions regardless of whether a problem has been defined.

Creative problem-solving is less structured than other innovation processes and encourages exploring open-ended solutions. It also focuses on developing new perspectives and fostering creativity in the workplace . Its benefits include:

  • Finding creative solutions to complex problems : User research can insufficiently illustrate a situation’s complexity. While other innovation processes rely on this information, creative problem-solving can yield solutions without it.
  • Adapting to change : Business is constantly changing, and business leaders need to adapt. Creative problem-solving helps overcome unforeseen challenges and find solutions to unconventional problems.
  • Fueling innovation and growth : In addition to solutions, creative problem-solving can spark innovative ideas that drive company growth. These ideas can lead to new product lines, services, or a modified operations structure that improves efficiency.

Design Thinking and Innovation | Uncover creative solutions to your business problems | Learn More

Creative problem-solving is traditionally based on the following key principles :

1. Balance Divergent and Convergent Thinking

Creative problem-solving uses two primary tools to find solutions: divergence and convergence. Divergence generates ideas in response to a problem, while convergence narrows them down to a shortlist. It balances these two practices and turns ideas into concrete solutions.

2. Reframe Problems as Questions

By framing problems as questions, you shift from focusing on obstacles to solutions. This provides the freedom to brainstorm potential ideas.

3. Defer Judgment of Ideas

When brainstorming, it can be natural to reject or accept ideas right away. Yet, immediate judgments interfere with the idea generation process. Even ideas that seem implausible can turn into outstanding innovations upon further exploration and development.

4. Focus on "Yes, And" Instead of "No, But"

Using negative words like "no" discourages creative thinking. Instead, use positive language to build and maintain an environment that fosters the development of creative and innovative ideas.

Creative Problem-Solving and Design Thinking

Whereas creative problem-solving facilitates developing innovative ideas through a less structured workflow, design thinking takes a far more organized approach.

Design thinking is a human-centered, solutions-based process that fosters the ideation and development of solutions. In the online course Design Thinking and Innovation , Harvard Business School Dean Srikant Datar leverages a four-phase framework to explain design thinking.

The four stages are:

The four stages of design thinking: clarify, ideate, develop, and implement

  • Clarify: The clarification stage allows you to empathize with the user and identify problems. Observations and insights are informed by thorough research. Findings are then reframed as problem statements or questions.
  • Ideate: Ideation is the process of coming up with innovative ideas. The divergence of ideas involved with creative problem-solving is a major focus.
  • Develop: In the development stage, ideas evolve into experiments and tests. Ideas converge and are explored through prototyping and open critique.
  • Implement: Implementation involves continuing to test and experiment to refine the solution and encourage its adoption.

Creative problem-solving primarily operates in the ideate phase of design thinking but can be applied to others. This is because design thinking is an iterative process that moves between the stages as ideas are generated and pursued. This is normal and encouraged, as innovation requires exploring multiple ideas.

Creative Problem-Solving Tools

While there are many useful tools in the creative problem-solving process, here are three you should know:

Creating a Problem Story

One way to innovate is by creating a story about a problem to understand how it affects users and what solutions best fit their needs. Here are the steps you need to take to use this tool properly.

1. Identify a UDP

Create a problem story to identify the undesired phenomena (UDP). For example, consider a company that produces printers that overheat. In this case, the UDP is "our printers overheat."

2. Move Forward in Time

To move forward in time, ask: “Why is this a problem?” For example, minor damage could be one result of the machines overheating. In more extreme cases, printers may catch fire. Don't be afraid to create multiple problem stories if you think of more than one UDP.

3. Move Backward in Time

To move backward in time, ask: “What caused this UDP?” If you can't identify the root problem, think about what typically causes the UDP to occur. For the overheating printers, overuse could be a cause.

Following the three-step framework above helps illustrate a clear problem story:

  • The printer is overused.
  • The printer overheats.
  • The printer breaks down.

You can extend the problem story in either direction if you think of additional cause-and-effect relationships.

4. Break the Chains

By this point, you’ll have multiple UDP storylines. Take two that are similar and focus on breaking the chains connecting them. This can be accomplished through inversion or neutralization.

  • Inversion: Inversion changes the relationship between two UDPs so the cause is the same but the effect is the opposite. For example, if the UDP is "the more X happens, the more likely Y is to happen," inversion changes the equation to "the more X happens, the less likely Y is to happen." Using the printer example, inversion would consider: "What if the more a printer is used, the less likely it’s going to overheat?" Innovation requires an open mind. Just because a solution initially seems unlikely doesn't mean it can't be pursued further or spark additional ideas.
  • Neutralization: Neutralization completely eliminates the cause-and-effect relationship between X and Y. This changes the above equation to "the more or less X happens has no effect on Y." In the case of the printers, neutralization would rephrase the relationship to "the more or less a printer is used has no effect on whether it overheats."

Even if creating a problem story doesn't provide a solution, it can offer useful context to users’ problems and additional ideas to be explored. Given that divergence is one of the fundamental practices of creative problem-solving, it’s a good idea to incorporate it into each tool you use.

Brainstorming

Brainstorming is a tool that can be highly effective when guided by the iterative qualities of the design thinking process. It involves openly discussing and debating ideas and topics in a group setting. This facilitates idea generation and exploration as different team members consider the same concept from multiple perspectives.

Hosting brainstorming sessions can result in problems, such as groupthink or social loafing. To combat this, leverage a three-step brainstorming method involving divergence and convergence :

  • Have each group member come up with as many ideas as possible and write them down to ensure the brainstorming session is productive.
  • Continue the divergence of ideas by collectively sharing and exploring each idea as a group. The goal is to create a setting where new ideas are inspired by open discussion.
  • Begin the convergence of ideas by narrowing them down to a few explorable options. There’s no "right number of ideas." Don't be afraid to consider exploring all of them, as long as you have the resources to do so.

Alternate Worlds

The alternate worlds tool is an empathetic approach to creative problem-solving. It encourages you to consider how someone in another world would approach your situation.

For example, if you’re concerned that the printers you produce overheat and catch fire, consider how a different industry would approach the problem. How would an automotive expert solve it? How would a firefighter?

Be creative as you consider and research alternate worlds. The purpose is not to nail down a solution right away but to continue the ideation process through diverging and exploring ideas.

Which HBS Online Entrepreneurship and Innovation Course is Right for You? | Download Your Free Flowchart

Continue Developing Your Skills

Whether you’re an entrepreneur, marketer, or business leader, learning the ropes of design thinking can be an effective way to build your skills and foster creativity and innovation in any setting.

If you're ready to develop your design thinking and creative problem-solving skills, explore Design Thinking and Innovation , one of our online entrepreneurship and innovation courses. If you aren't sure which course is the right fit, download our free course flowchart to determine which best aligns with your goals.

importance of problem solving in business

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Introduction to Problem Solving Skills

What is problem solving and why is it important.

Defining problem solving skills

The ability to solve problems is a basic life skill and is essential to our day-to-day lives, at home, at school, and at work. We solve problems every day without really thinking about how we solve them. For example: it’s raining and you need to go to the store. What do you do? There are lots of possible solutions. Take your umbrella and walk. If you don't want to get wet, you can drive, or take the bus. You might decide to call a friend for a ride, or you might decide to go to the store another day. There is no right way to solve this problem and different people will solve it differently.

Problem solving is the process of identifying a problem, developing possible solution paths, and taking the appropriate course of action.

Why is problem solving important? Good problem solving skills empower you not only in your personal life but are critical in your professional life. In the current fast-changing global economy, employers often identify everyday problem solving as crucial to the success of their organizations. For employees, problem solving can be used to develop practical and creative solutions, and to show independence and initiative to employers.

Throughout this case study you will be asked to jot down your thoughts in idea logs. These idea logs are used for reflection on concepts and for answering short questions. When you click on the "Next" button, your responses will be saved for that page. If you happen to close the webpage, you will lose your work on the page you were on, but previous pages will be saved. At the end of the case study, click on the "Finish and Export to PDF" button to acknowledge completion of the case study and receive a PDF document of your idea logs.

What Does Problem Solving Look Like?

IDEAL heuristic strategy for problem solving

The ability to solve problems is a skill, and just like any other skill, the more you practice, the better you get. So how exactly do you practice problem solving? Learning about different problem solving strategies and when to use them will give you a good start. Problem solving is a process. Most strategies provide steps that help you identify the problem and choose the best solution. There are two basic types of strategies: algorithmic and heuristic.

Algorithmic strategies are traditional step-by-step guides to solving problems. They are great for solving math problems (in algebra: multiply and divide, then add or subtract) or for helping us remember the correct order of things (a mnemonic such as “Spring Forward, Fall Back” to remember which way the clock changes for daylight saving time, or “Righty Tighty, Lefty Loosey” to remember what direction to turn bolts and screws). Algorithms are best when there is a single path to the correct solution.

But what do you do when there is no single solution for your problem? Heuristic methods are general guides used to identify possible solutions. A popular one that is easy to remember is IDEAL [ Bransford & Stein, 1993 ] :

  • I dentify the problem
  • D efine the context of the problem
  • E xplore possible strategies
  • A ct on best solution

IDEAL is just one problem solving strategy. Building a toolbox of problem solving strategies will improve your problem solving skills. With practice, you will be able to recognize and use multiple strategies to solve complex problems.

Watch the video

What is the best way to get a peanut out of a tube that cannot be moved? Watch a chimpanzee solve this problem in the video below [ Geert Stienissen, 2010 ].

[PDF transcript]

Describe the series of steps you think the chimpanzee used to solve this problem.

  • [Page 2: What does Problem Solving Look Like?] Describe the series of steps you think the chimpanzee used to solve this problem.

Think of an everyday problem you've encountered recently and describe your steps for solving it.

  • [Page 2: What does Problem Solving Look Like?] Think of an everyday problem you've encountered recently and describe your steps for solving it.

Developing Problem Solving Processes

Problem solving is a process that uses steps to solve problems. But what does that really mean? Let's break it down and start building our toolbox of problem solving strategies.

What is the first step of solving any problem? The first step is to recognize that there is a problem and identify the right cause of the problem. This may sound obvious, but similar problems can arise from different events, and the real issue may not always be apparent. To really solve the problem, it's important to find out what started it all. This is called identifying the root cause .

Example: You and your classmates have been working long hours on a project in the school's workshop. The next afternoon, you try to use your student ID card to access the workshop, but discover that your magnetic strip has been demagnetized. Since the card was a couple of years old, you chalk it up to wear and tear and get a new ID card. Later that same week you learn that several of your classmates had the same problem! After a little investigation, you discover that a strong magnet was stored underneath a workbench in the workshop. The magnet was the root cause of the demagnetized student ID cards.

The best way to identify the root cause of the problem is to ask questions and gather information. If you have a vague problem, investigating facts is more productive than guessing a solution. Ask yourself questions about the problem. What do you know about the problem? What do you not know? When was the last time it worked correctly? What has changed since then? Can you diagram the process into separate steps? Where in the process is the problem occurring? Be curious, ask questions, gather facts, and make logical deductions rather than assumptions.

Watch Adam Savage from Mythbusters, describe his problem solving process [ ForaTv, 2010 ]. As you watch this section of the video, try to identify the questions he asks and the different strategies he uses.

Adam Savage shared many of his problem solving processes. List the ones you think are the five most important. Your list may be different from other people in your class—that's ok!

  • [Page 3: Developing Problem Solving Processes] Adam Savage shared many of his problem solving processes. List the ones you think are the five most important.

“The ability to ask the right question is more than half the battle of finding the answer.” — Thomas J. Watson , founder of IBM

Voices From the Field: Solving Problems

In manufacturing facilities and machine shops, everyone on the floor is expected to know how to identify problems and find solutions. Today's employers look for the following skills in new employees: to analyze a problem logically, formulate a solution, and effectively communicate with others.

In this video, industry professionals share their own problem solving processes, the problem solving expectations of their employees, and an example of how a problem was solved.

Meet the Partners:

  • Taconic High School in Pittsfield, Massachusetts, is a comprehensive, fully accredited high school with special programs in Health Technology, Manufacturing Technology, and Work-Based Learning.
  • Berkshire Community College in Pittsfield, Massachusetts, prepares its students with applied manufacturing technical skills, providing hands-on experience at industrial laboratories and manufacturing facilities, and instructing them in current technologies.
  • H.C. Starck in Newton, Massachusetts, specializes in processing and manufacturing technology metals, such as tungsten, niobium, and tantalum. In almost 100 years of experience, they hold over 900 patents, and continue to innovate and develop new products.
  • Nypro Healthcare in Devens, Massachusetts, specializes in precision injection-molded healthcare products. They are committed to good manufacturing processes including lean manufacturing and process validation.

Making Decisions

Now that you have a couple problem solving strategies in your toolbox, let's practice. In this exercise, you are given a scenario and you will be asked to decide what steps you would take to identify and solve the problem.

Scenario: You are a new employee and have just finished your training. As your first project, you have been assigned the milling of several additional components for a regular customer. Together, you and your trainer, Bill, set up for the first run. Checking your paperwork, you gather the tools and materials on the list. As you are mounting the materials on the table, you notice that you didn't grab everything and hurriedly grab a few more items from one of the bins. Once the material is secured on the CNC table, you load tools into the tool carousel in the order listed on the tool list and set the fixture offsets.

Bill tells you that since this is a rerun of a job several weeks ago, the CAD/CAM model has already been converted to CNC G-code. Bill helps you download the code to the CNC machine. He gives you the go-ahead and leaves to check on another employee. You decide to start your first run.

What problems did you observe in the video?

  • [Page 5: Making Decisions] What problems did you observe in the video?
  • What do you do next?
  • Try to fix it yourself.
  • Ask your trainer for help.

As you are cleaning up, you think about what happened and wonder why it happened. You try to create a mental picture of what happened. You are not exactly sure what the end mill hit, but it looked like it might have hit the dowel pin. You wonder if you grabbed the correct dowel pins from the bins earlier.

You can think of two possible next steps. You can recheck the dowel pin length to make sure it is the correct length, or do a dry run using the CNC single step or single block function with the spindle empty to determine what actually happened.

screenshot of cnc problem

  • Check the dowel pins.
  • Use the single step/single block function to determine what happened.

You notice that your trainer, Bill, is still on the floor and decide to ask him for help. You describe the problem to him. Bill asks if you know what the end mill ran into. You explain that you are not sure but you think it was the dowel pin. Bill reminds you that it is important to understand what happened so you can fix the correct problem. He suggests that you start all over again and begin with a dry run using the single step/single block function, with the spindle empty, to determine what it hit. Or, since it happened at the end, he mentions that you can also check the G-code to make sure the Z-axis is raised before returning to the home position.

ask help from a more experienced person

  • Run the single step/single block function.
  • Edit the G-code to raise the Z-axis.

You finish cleaning up and check the CNC for any damage. Luckily, everything looks good. You check your paperwork and gather the components and materials again. You look at the dowel pins you used earlier, and discover that they are not the right length. As you go to grab the correct dowel pins, you have to search though several bins. For the first time, you are aware of the mess - it looks like the dowel pins and other items have not been put into the correctly labeled bins. You spend 30 minutes straightening up the bins and looking for the correct dowel pins.

Finally finding them, you finish setting up. You load tools into the tool carousel in the order listed on the tool list and set the fixture offsets. Just to make sure, you use the CNC single step/single block function, to do a dry run of the part. Everything looks good! You are ready to create your first part. The first component is done, and, as you admire your success, you notice that the part feels hotter than it should.

You wonder why? You go over the steps of the process to mentally figure out what could be causing the residual heat. You wonder if there is a problem with the CNC's coolant system or if the problem is in the G-code.

  • Look at the G-code.

After thinking about the problem, you decide that maybe there's something wrong with the setup. First, you clean up the damaged materials and remove the broken tool. You check the CNC machine carefully for any damage. Luckily, everything looks good. It is time to start over again from the beginning.

You again check your paperwork and gather the tools and materials on the setup sheet. After securing the new materials, you use the CNC single step/single block function with the spindle empty, to do a dry run of the part. You watch carefully to see if you can figure out what happened. It looks to you like the spindle barely misses hitting the dowel pin. You determine that the end mill was broken when it hit the dowel pin while returning to the start position.

idea at cnc machine

After conducting a dry run using the single step/single block function, you determine that the end mill was damaged when it hit the dowel pin on its return to the home position. You discuss your options with Bill. Together, you decide the best thing to do would be to edit the G-code and raise the Z-axis before returning to home. You open the CNC control program and edit the G-code. Just to make sure, you use the CNC single step/single block function, to do another dry run of the part. You are ready to create your first part. It works. You first part is completed. Only four more to go.

software or hardware problem

As you are cleaning up, you notice that the components are hotter than you expect and the end mill looks more worn than it should be. It dawns on you that while you were milling the component, the coolant didn't turn on. You wonder if it is a software problem in the G-code or hardware problem with the CNC machine.

It's the end of the day and you decide to finish the rest of the components in the morning.

  • You decide to look at the G-code in the morning.
  • You leave a note on the machine, just in case.

You decide that the best thing to do would be to edit the G-code and raise the Z-axis of the spindle before it returns to home. You open the CNC control program and edit the G-code.

While editing the G-code to raise the Z-axis, you notice that the coolant is turned off at the beginning of the code and at the end of the code. The coolant command error caught your attention because your coworker, Mark, mentioned having a similar issue during lunch. You change the coolant command to turn the mist on.

  • You decide to talk with your supervisor.
  • You discuss what happened with a coworker over lunch.

As you reflect on the residual heat problem, you think about the machining process and the factors that could have caused the issue. You try to think of anything and everything that could be causing the issue. Are you using the correct tool for the specified material? Are you using the specified material? Is it running at the correct speed? Is there enough coolant? Are there chips getting in the way?

Wait, was the coolant turned on? As you replay what happened in your mind, you wonder why the coolant wasn't turned on. You decide to look at the G-code to find out what is going on.

From the milling machine computer, you open the CNC G-code. You notice that there are no coolant commands. You add them in and on the next run, the coolant mist turns on and the residual heat issues is gone. Now, its on to creating the rest of the parts.

Have you ever used brainstorming to solve a problem? Chances are, you've probably have, even if you didn't realize it.

You notice that your trainer, Bill, is on the floor and decide to ask him for help. You describe the problem with the end mill breaking, and how you discovered that items are not being returned to the correctly labeled bins. You think this caused you to grab the incorrect length dowel pins on your first run. You have sorted the bins and hope that the mess problem is fixed. You then go on to tell Bill about the residual heat issue with the completed part.

Together, you go to the milling machine. Bill shows you how to check the oil and coolant levels. Everything looks good at the machine level. Next, on the CNC computer, you open the CNC G-code. While looking at the code, Bill points out that there are no coolant commands. Bill adds them in and when you rerun the program, it works.

Bill is glad you mentioned the problem to him. You are the third worker to mention G-code issues over the last week. You noticed the coolant problems in your G-code, John noticed a Z-axis issue in his G-code, and Sam had issues with both the Z-axis and the coolant. Chances are, there is a bigger problem and Bill will need to investigate the root cause .

Talking with Bill, you discuss the best way to fix the problem. Bill suggests editing the G-code to raise the Z-axis of the spindle before it returns to its home position. You open the CNC control program and edit the G-code. Following the setup sheet, you re-setup the job and use the CNC single step/single block function, to do another dry run of the part. Everything looks good, so you run the job again and create the first part. It works. Since you need four of each component, you move on to creating the rest of them before cleaning up and leaving for the day.

It's a new day and you have new components to create. As you are setting up, you go in search of some short dowel pins. You discover that the bins are a mess and components have not been put away in the correctly labeled bins. You wonder if this was the cause of yesterday's problem. As you reorganize the bins and straighten up the mess, you decide to mention the mess issue to Bill in your afternoon meeting.

You describe the bin mess and using the incorrect length dowels to Bill. He is glad you mentioned the problem to him. You are not the first person to mention similar issues with tools and parts not being put away correctly. Chances are there is a bigger safety issue here that needs to be addressed in the next staff meeting.

In any workplace, following proper safety and cleanup procedures is always important. This is especially crucial in manufacturing where people are constantly working with heavy, costly and sometimes dangerous equipment. When issues and problems arise, it is important that they are addressed in an efficient and timely manner. Effective communication is an important tool because it can prevent problems from recurring, avoid injury to personnel, reduce rework and scrap, and ultimately, reduce cost, and save money.

You now know that the end mill was damaged when it hit the dowel pin. It seems to you that the easiest thing to do would be to edit the G-code and raise the Z-axis position of the spindle before it returns to the home position. You open the CNC control program and edit the G-code, raising the Z-axis. Starting over, you follow the setup sheet and re-setup the job. This time, you use the CNC single step/single block function, to do another dry run of the part. Everything looks good, so you run the job again and create the first part.

At the end of the day, you are reviewing your progress with your trainer, Bill. After you describe the day's events, he reminds you to always think about safety and the importance of following work procedures. He decides to bring the issue up in the next morning meeting as a reminder to everyone.

In any workplace, following proper procedures (especially those that involve safety) is always important. This is especially crucial in manufacturing where people are constantly working with heavy, costly, and sometimes dangerous equipment. When issues and problems arise, it is important that they are addressed in an efficient and timely manner. Effective communication is an important tool because it can prevent problems from recurring, avoid injury to personnel, reduce rework and scrap, and ultimately, reduce cost, and save money. One tool to improve communication is the morning meeting or huddle.

The next morning, you check the G-code to determine what is wrong with the coolant. You notice that the coolant is turned off at the beginning of the code and also at the end of the code. This is strange. You change the G-code to turn the coolant on at the beginning of the run and off at the end. This works and you create the rest of the parts.

Throughout the day, you keep wondering what caused the G-code error. At lunch, you mention the G-code error to your coworker, John. John is not surprised. He said that he encountered a similar problem earlier this week. You decide to talk with your supervisor the next time you see him.

You are in luck. You see your supervisor by the door getting ready to leave. You hurry over to talk with him. You start off by telling him about how you asked Bill for help. Then you tell him there was a problem and the end mill was damaged. You describe the coolant problem in the G-code. Oh, and by the way, John has seen a similar problem before.

Your supervisor doesn't seem overly concerned, errors happen. He tells you "Good job, I am glad you were able to fix the issue." You are not sure whether your supervisor understood your explanation of what happened or that it had happened before.

The challenge of communicating in the workplace is learning how to share your ideas and concerns. If you need to tell your supervisor that something is not going well, it is important to remember that timing, preparation, and attitude are extremely important.

It is the end of your shift, but you want to let the next shift know that the coolant didn't turn on. You do not see your trainer or supervisor around. You decide to leave a note for the next shift so they are aware of the possible coolant problem. You write a sticky note and leave it on the monitor of the CNC control system.

How effective do you think this solution was? Did it address the problem?

In this scenario, you discovered several problems with the G-code that need to be addressed. When issues and problems arise, it is important that they are addressed in an efficient and timely manner. Effective communication is an important tool because it can prevent problems from recurring and avoid injury to personnel. The challenge of communicating in the workplace is learning how and when to share your ideas and concerns. If you need to tell your co-workers or supervisor that there is a problem, it is important to remember that timing and the method of communication are extremely important.

You are able to fix the coolant problem in the G-code. While you are glad that the problem is fixed, you are worried about why it happened in the first place. It is important to remember that if a problem keeps reappearing, you may not be fixing the right problem. You may only be addressing the symptoms.

You decide to talk to your trainer. Bill is glad you mentioned the problem to him. You are the third worker to mention G-code issues over the last week. You noticed the coolant problems in your G-code, John noticed a Z-axis issue in his G-code, and Sam had issues with both the Z-axis and the coolant. Chances are, there is a bigger problem and Bill will need to investigate the root cause .

Over lunch, you ask your coworkers about the G-code problem and what may be causing the error. Several people mention having similar problems but do not know the cause.

You have now talked to three coworkers who have all experienced similar coolant G-code problems. You make a list of who had the problem, when they had the problem, and what each person told you.

When you see your supervisor later that afternoon, you are ready to talk with him. You describe the problem you had with your component and the damaged bit. You then go on to tell him about talking with Bill and discovering the G-code issue. You show him your notes on your coworkers' coolant issues, and explain that you think there might be a bigger problem.

You supervisor thanks you for your initiative in identifying this problem. It sounds like there is a bigger problem and he will need to investigate the root cause. He decides to call a team huddle to discuss the issue, gather more information, and talk with the team about the importance of communication.

Root Cause Analysis

flower root cause of a problem

Root cause analysis ( RCA ) is a method of problem solving that identifies the underlying causes of an issue. Root cause analysis helps people answer the question of why the problem occurred in the first place. RCA uses clear cut steps in its associated tools, like the "5 Whys Analysis" and the "Cause and Effect Diagram," to identify the origin of the problem, so that you can:

  • Determine what happened.
  • Determine why it happened.
  • Fix the problem so it won’t happen again.

RCA works under the idea that systems and events are connected. An action in one area triggers an action in another, and another, and so on. By tracing back these actions, you can discover where the problem started and how it developed into the problem you're now facing. Root cause analysis can prevent problems from recurring, reduce injury to personnel, reduce rework and scrap, and ultimately, reduce cost and save money. There are many different RCA techniques available to determine the root cause of a problem. These are just a few:

  • Root Cause Analysis Tools
  • 5 Whys Analysis
  • Fishbone or Cause and Effect Diagram
  • Pareto Analysis

5 whys diagram root cause

How Huddles Work

group huddle discussion meeting

Communication is a vital part of any setting where people work together. Effective communication helps employees and managers form efficient teams. It builds trusts between employees and management, and reduces unnecessary competition because each employee knows how their part fits in the larger goal.

One tool that management can use to promote communication in the workplace is the huddle . Just like football players on the field, a huddle is a short meeting where everyone is standing in a circle. A daily team huddle ensures that team members are aware of changes to the schedule, reiterated problems and safety issues, and how their work impacts one another. When done right, huddles create collaboration, communication, and accountability to results. Impromptu huddles can be used to gather information on a specific issue and get each team member's input.

The most important thing to remember about huddles is that they are short, lasting no more than 10 minutes, and their purpose is to communicate and identify. In essence, a huddle’s purpose is to identify priorities, communicate essential information, and discover roadblocks to productivity.

Who uses huddles? Many industries and companies use daily huddles. At first thought, most people probably think of hospitals and their daily patient update meetings, but lots of managers use daily meetings to engage their employees. Here are a few examples:

  • Brian Scudamore, CEO of 1-800-Got-Junk? , uses the daily huddle as an operational tool to take the pulse of his employees and as a motivational tool. Watch a morning huddle meeting .
  • Fusion OEM, an outsourced manufacturing and production company. What do employees take away from the daily huddle meeting .
  • Biz-Group, a performance consulting group. Tips for a successful huddle .

Brainstorming

brainstorming small lightbulbs combined become a big idea

One tool that can be useful in problem solving is brainstorming . Brainstorming is a creativity technique designed to generate a large number of ideas for the solution to a problem. The method was first popularized in 1953 by Alex Faickney Osborn in the book Applied Imagination . The goal is to come up with as many ideas as you can in a fixed amount of time. Although brainstorming is best done in a group, it can be done individually. Like most problem solving techniques, brainstorming is a process.

  • Define a clear objective.
  • Have an agreed a time limit.
  • During the brainstorming session, write down everything that comes to mind, even if the idea sounds crazy.
  • If one idea leads to another, write down that idea too.
  • Combine and refine ideas into categories of solutions.
  • Assess and analyze each idea as a potential solution.

When used during problem solving, brainstorming can offer companies new ways of encouraging staff to think creatively and improve production. Brainstorming relies on team members' diverse experiences, adding to the richness of ideas explored. This means that you often find better solutions to the problems. Team members often welcome the opportunity to contribute ideas and can provide buy-in for the solution chosen—after all, they are more likely to be committed to an approach if they were involved in its development. What's more, because brainstorming is fun, it helps team members bond.

  • Watch Peggy Morgan Collins, a marketing executive at Power Curve Communications discuss How to Stimulate Effective Brainstorming .
  • Watch Kim Obbink, CEO of Filter Digital, a digital content company, and her team share their top five rules for How to Effectively Generate Ideas .

Importance of Good Communication and Problem Description

talking too much when describing a problem

Communication is one of the most frequent activities we engage in on a day-to-day basis. At some point, we have all felt that we did not effectively communicate an idea as we would have liked. The key to effective communication is preparation. Rather than attempting to haphazardly improvise something, take a few minutes and think about what you want say and how you will say it. If necessary, write yourself a note with the key points or ideas in the order you want to discuss them. The notes can act as a reminder or guide when you talk to your supervisor.

Tips for clear communication of an issue:

  • Provide a clear summary of your problem. Start at the beginning, give relevant facts, timelines, and examples.
  • Avoid including your opinion or personal attacks in your explanation.
  • Avoid using words like "always" or "never," which can give the impression that you are exaggerating the problem.
  • If this is an ongoing problem and you have collected documentation, give it to your supervisor once you have finished describing the problem.
  • Remember to listen to what's said in return; communication is a two-way process.

Not all communication is spoken. Body language is nonverbal communication that includes your posture, your hands and whether you make eye contact. These gestures can be subtle or overt, but most importantly they communicate meaning beyond what is said. When having a conversation, pay attention to how you stand. A stiff position with arms crossed over your chest may imply that you are being defensive even if your words state otherwise. Shoving your hands in your pockets when speaking could imply that you have something to hide. Be wary of using too many hand gestures because this could distract listeners from your message.

The challenge of communicating in the workplace is learning how and when to share your ideas or concerns. If you need to tell your supervisor or co-worker about something that is not going well, keep in mind that good timing and good attitude will go a long way toward helping your case.

Like all skills, effective communication needs to be practiced. Toastmasters International is perhaps the best known public speaking organization in the world. Toastmasters is open to anyone who wish to improve their speaking skills and is willing to put in the time and effort to do so. To learn more, visit Toastmasters International .

Methods of Communication

different ways to communicate

Communication of problems and issues in any workplace is important, particularly when safety is involved. It is therefore crucial in manufacturing where people are constantly working with heavy, costly, and sometimes dangerous equipment. As issues and problems arise, they need to be addressed in an efficient and timely manner. Effective communication is an important skill because it can prevent problems from recurring, avoid injury to personnel, reduce rework and scrap, and ultimately, reduce cost and save money.

There are many different ways to communicate: in person, by phone, via email, or written. There is no single method that fits all communication needs, each one has its time and place.

In person: In the workplace, face-to-face meetings should be utilized whenever possible. Being able to see the person you need to speak to face-to-face gives you instant feedback and helps you gauge their response through their body language. Be careful of getting sidetracked in conversation when you need to communicate a problem.

Email: Email has become the communication standard for most businesses. It can be accessed from almost anywhere and is great for things that don’t require an immediate response. Email is a great way to communicate non-urgent items to large amounts of people or just your team members. One thing to remember is that most people's inboxes are flooded with emails every day and unless they are hyper vigilant about checking everything, important items could be missed. For issues that are urgent, especially those around safety, email is not always be the best solution.

Phone: Phone calls are more personal and direct than email. They allow us to communicate in real time with another person, no matter where they are. Not only can talking prevent miscommunication, it promotes a two-way dialogue. You don’t have to worry about your words being altered or the message arriving on time. However, mobile phone use and the workplace don't always mix. In particular, using mobile phones in a manufacturing setting can lead to a variety of problems, cause distractions, and lead to serious injury.

Written: Written communication is appropriate when detailed instructions are required, when something needs to be documented, or when the person is too far away to easily speak with over the phone or in person.

There is no "right" way to communicate, but you should be aware of how and when to use the appropriate form of communication for your situation. When deciding the best way to communicate with a co-worker or manager, put yourself in their shoes, and think about how you would want to learn about the issue. Also, consider what information you would need to know to better understand the issue. Use your good judgment of the situation and be considerate of your listener's viewpoint.

Did you notice any other potential problems in the previous exercise?

  • [Page 6:] Did you notice any other potential problems in the previous exercise?

Summary of Strategies

In this exercise, you were given a scenario in which there was a problem with a component you were creating on a CNC machine. You were then asked how you wanted to proceed. Depending on your path through this exercise, you might have found an easy solution and fixed it yourself, asked for help and worked with your trainer, or discovered an ongoing G-code problem that was bigger than you initially thought.

When issues and problems arise, it is important that they are addressed in an efficient and timely manner. Communication is an important tool because it can prevent problems from recurring, avoid injury to personnel, reduce rework and scrap, and ultimately, reduce cost, and save money. Although, each path in this exercise ended with a description of a problem solving tool for your toolbox, the first step is always to identify the problem and define the context in which it happened.

There are several strategies that can be used to identify the root cause of a problem. Root cause analysis (RCA) is a method of problem solving that helps people answer the question of why the problem occurred. RCA uses a specific set of steps, with associated tools like the “5 Why Analysis" or the “Cause and Effect Diagram,” to identify the origin of the problem, so that you can:

Once the underlying cause is identified and the scope of the issue defined, the next step is to explore possible strategies to fix the problem.

If you are not sure how to fix the problem, it is okay to ask for help. Problem solving is a process and a skill that is learned with practice. It is important to remember that everyone makes mistakes and that no one knows everything. Life is about learning. It is okay to ask for help when you don’t have the answer. When you collaborate to solve problems you improve workplace communication and accelerates finding solutions as similar problems arise.

One tool that can be useful for generating possible solutions is brainstorming . Brainstorming is a technique designed to generate a large number of ideas for the solution to a problem. The method was first popularized in 1953 by Alex Faickney Osborn in the book Applied Imagination. The goal is to come up with as many ideas as you can, in a fixed amount of time. Although brainstorming is best done in a group, it can be done individually.

Depending on your path through the exercise, you may have discovered that a couple of your coworkers had experienced similar problems. This should have been an indicator that there was a larger problem that needed to be addressed.

In any workplace, communication of problems and issues (especially those that involve safety) is always important. This is especially crucial in manufacturing where people are constantly working with heavy, costly, and sometimes dangerous equipment. When issues and problems arise, it is important that they be addressed in an efficient and timely manner. Effective communication is an important tool because it can prevent problems from recurring, avoid injury to personnel, reduce rework and scrap, and ultimately, reduce cost and save money.

One strategy for improving communication is the huddle . Just like football players on the field, a huddle is a short meeting with everyone standing in a circle. A daily team huddle is a great way to ensure that team members are aware of changes to the schedule, any problems or safety issues are identified and that team members are aware of how their work impacts one another. When done right, huddles create collaboration, communication, and accountability to results. Impromptu huddles can be used to gather information on a specific issue and get each team member's input.

To learn more about different problem solving strategies, choose an option below. These strategies accompany the outcomes of different decision paths in the problem solving exercise.

  • View Problem Solving Strategies Select a strategy below... Root Cause Analysis How Huddles Work Brainstorming Importance of Good Problem Description Methods of Communication

Communication is one of the most frequent activities we engage in on a day-to-day basis. At some point, we have all felt that we did not effectively communicate an idea as we would have liked. The key to effective communication is preparation. Rather than attempting to haphazardly improvise something, take a few minutes and think about what you want say and how you will say it. If necessary, write yourself a note with the key points or ideas in the order you want to discuss them. The notes can act as a reminder or guide during your meeting.

  • Provide a clear summary of the problem. Start at the beginning, give relevant facts, timelines, and examples.

In person: In the workplace, face-to-face meetings should be utilized whenever possible. Being able to see the person you need to speak to face-to-face gives you instant feedback and helps you gauge their response in their body language. Be careful of getting sidetracked in conversation when you need to communicate a problem.

There is no "right" way to communicate, but you should be aware of how and when to use the appropriate form of communication for the situation. When deciding the best way to communicate with a co-worker or manager, put yourself in their shoes, and think about how you would want to learn about the issue. Also, consider what information you would need to know to better understand the issue. Use your good judgment of the situation and be considerate of your listener's viewpoint.

"Never try to solve all the problems at once — make them line up for you one-by-one.” — Richard Sloma

Problem Solving: An Important Job Skill

Problem solving improves efficiency and communication on the shop floor. It increases a company's efficiency and profitability, so it's one of the top skills employers look for when hiring new employees. Recent industry surveys show that employers consider soft skills, such as problem solving, as critical to their business’s success.

The 2011 survey, "Boiling Point? The skills gap in U.S. manufacturing ," polled over a thousand manufacturing executives who reported that the number one skill deficiency among their current employees is problem solving, which makes it difficult for their companies to adapt to the changing needs of the industry.

In this video, industry professionals discuss their expectations and present tips for new employees joining the manufacturing workforce.

Quick Summary

  • [Quick Summary: Question1] What are two things you learned in this case study?
  • What question(s) do you still have about the case study?
  • [Quick Summary: Question2] What question(s) do you still have about the case study?
  • Is there anything you would like to learn more about with respect to this case study?
  • [Quick Summary: Question3] Is there anything you would like to learn more about with respect to this case study?

Why Problem Solving is Important in the Workplace

profile picture ben schwencke

Ben Schwencke

Ben is responsible for talent analytics at Test Partnership and is often who you will speak to if you book a demo .

What is problem solving?

What is an example of problem solving, why problem solving is important, how to improve problem solving, how to assess candidates on their problem solving, our recommended test partnership assessments for measuring problem solving.

image description

Problem solving in the workplace refers to a person’s ability to handle difficult or unexpected situations and find solutions to complex business challenges. Employees with exceptional problem solving ability will carefully analyse the problem, identify a range of potential solutions, and correctly identify the most effective of the available solutions to remedy the situation. This ensures that employees in complex work who are relied upon to find effective solutions to key business issues are maximally equipped to deal with modern problems that face 21st century businesses.

Those with good problem solving ability will move the business forward more effectively.

Those lacking problem solving ability will inevitably recommend ineffective solutions to key business issues, solutions which will either fail to resolve the underlying issue or indeed exasperate it. For example, they may misinterpret the information presented to them, fail to identify effective solutions to problems, or provide solutions which are unsuitable or indeed counterproductive. Employees with poor problem solving ability cannot be relied upon when the unexpected happens, shifting the burden on other staff. As a result, problem solving ability is a common core competency when hiring professional, managerial, or technical roles, and highly prized by HR professionals and hiring managers.

Problem-solving refers to the ability to identify and resolve problems in an effective and efficient manner. An example of problem-solving can be seen in the role of a customer service representative. A customer service representative is responsible for handling customer complaints and issues, and finding a solution that will satisfy the customer.

Problem solving ability is essential to performance in any role where issues need to be dealt with quickly, or where the issues that employees face are particularly complex. Employees skilled in problem solving contribute to a more adaptable and productive work environment. It promotes teamwork, critical thinking, and strategic decision-making, leading to improved outcomes and organisational success.

Watch a video instead?

If you would prefer to watch a video, here Ben outlines why problem solving is important in the workplace:

For example, management consultants are expected to solve particularly complex issues that their clients may be facing, and within very specific time-frames. Should a consultant fail to provide a solution within the specified timeframe, this will inevitably look bad in the eyes of the client, sullying the relationship and potentially negatively impacting the consultancy’s reputation. However, a consultant with exceptional problem solving ability will most likely provide effective solutions to the client’s problems and provide them within the requisite time period.

"As a competency, problem solving is a common performance criterion for roles that require staff to solve urgent or complex problems." Ben Schwencke Consultant

As a competency, problem solving is a common performance criterion for roles that require staff to solve urgent or complex problems. These include, but are not limited to: management consultants, IT professionals, finance professionals, legal professionals, data scientists, managers, and executives. As a general rule, the more the role involves employees providing solutions to complex or urgent problems, the more important problem solving ability will be, and the more damage employees could potential cause if they lack those essential problem solving abilities in the workplace.

When a customer contacts a company with a problem, the customer service representative must first listen carefully to the customer's complaint and understand the issue. They then need to gather information and assess the situation to determine the cause of the problem.

They must evaluate different options and choose the best course of action to resolve the problem.

Next, they must evaluate different options and choose the best course of action to resolve the problem. Finally, they must implement the chosen solution and follow up to ensure that the problem has been fully resolved.

Problem solving as a psychological construct is underpinned predominantly by specific cognitive abilities. The ability to solve quantitative problems for example, is underpinned by a person’s level of numerical reasoning , and their ability to solve qualitative problems is underpinned by their verbal reasoning . Indeed, the academic research in this field suggests that the predictive validity of ability tests is largely attributable to problem solving abilities. Aptitude test questions are essentially just cognitive problems, and a candidate’s ability to solve them serves as a very useful proxy for their overall problem solving ability.

Other assessments may also measure problem solving to some degree, particularly certain assessment centre exercises, such as case study exercises. Here, candidates will be presented with a particular workplace relevant problem and told to generate solutions to that problem. Although this can be an effective method of assessing problem solving ability, assessment centre exercises are quite resource intensive, and are thus only suitable for the later stages of the recruitment process. Ability tests, however, can be used early in the recruitment process, ensuring that all subsequent candidate hold the requisite level of problem solving ability.

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The Importance of Problem Solving When Building a Business When you run up against an obstacle that seems insurmountable, the best thing to do is shift your perspective and try to look at it another way

By Jude Regev • Apr 30, 2019

Opinions expressed by Entrepreneur contributors are their own.

You're reading Entrepreneur Asia Pacific, an international franchise of Entrepreneur Media.

Something many successful entrepreneurs know is that you don't have to have an earth-shattering, game-changing idea to start a business. You just have to identify a problem and find a way to solve it. Sure, the thought of achieving overnight success with a billion-dollar idea is alluring, but the fact is that most of the successful business owners out there got to where they are by simply being good problem solvers along the way.

For anyone seeking a career change or considering starting a business and wondering how to approach it, some of the most important skills to brush up on are going to be your problem-solving skills. Here are some problem-solving approaches that could help aspiring entrepreneurs tackle the challenges that inevitably spring up along their way.

Take the Success Mindset

Approach each problem with a success mindset, which requires a specific set of skills and steps to problem-solving. The success mindset entails seeking out innovative ways to solve a problem by looking beyond what's already established, and never simply accepting that "this is the way it has to be done."

Once you begin to explore problems in this way, revolutionary solutions can appear that can disrupt and change systems for the better.

Change Your Perspective

Sometimes, when you run up against an obstacle that seems insurmountable, the best thing to do is shift your perspective and try to look at it another way. Turning a problem around and examining it from different angles can help you understand new possibilities.

This approach can help you in all kinds of situations, from the personal to the professional.

Keep it Going

Problem-solving is iterative. Trust me, you'll get a lot of practice using your problem-solving skills as you go through the process of building your business. You can have a plan, but issues will always crop up along the way, and you'll need to keep a clear head and app

Problems always emerge in new business models—those who are successful do not stop at their first iteration and are always looking beyond what's currently available in the marketplace of ideas. Sometimes the best way to tackle a problem is to create your own solution.

It may seem like an obvious point, but problem-solving is actually going to become the core of your business building strategy. Problem-solving is literally about creating value. That value will be the solution you offer your clients, as well as the solutions you create for yourself. The more value you create, the more your business will grow.

Founder-CEO, Jointer and Element Zero Network

Jude's talent for developing effective digital ideas and big data solutions have resulted in successfully growing five companies and three successful exits. Jointer.io, powered by artificial intelligence and blockchain technology, is designed to help investors and property owners increase their returns, minimize risks, and improve liquidity in the commercial real estate industry. Element Zero is a not-for-profit organization that has developed a turnkey stablecoin platform that provides the ability for organizations and governments to launch stablecoins benefiting from the Element Zero Network’s stablecoin 2.0 methodology. Element Zero platform’s model is built to make the world a better place for all by protecting against long-term inflation and eliminating the possibility for any volatility.

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Problem Solving 101 – How to Make Better Decisions

This decision-making guide is designed to understand better what problem-solving and critical thinking entail. Not only will you learn about how to make better decisions in business, but these ideas can also make you a better problem solver at school or in your personal life when faced with challenges. Additionally, throughout this guide, we will provide you amazing online tools, videos, and resources to help you continue to learn how to make decisions better in your daily activities.

  • Chapter 1 – The Importance of Problem Solving
  • Chapter 2 – Critical Thinking in the Decision Making Process
  • Chapter 3 – Are You Asking the right Questions?
  • Chapter 4 – 6 Effective Methods for Problem Solving

The Importance of Creative Problem-Solving in Business and Life

Problem-solving is one of the leadership skills that successful business professionals and entrepreneurs are expected to have, yet many struggles with the simplest decisions. What makes solving daily problems so natural for one person and such a struggle for the next?

The truth is, even experienced decision-makers continually hone and perfect their creative problem-solving skills. And there are many compelling reasons to do so. Not only do those who make better decisions have more job opportunities, get promoted more often, and increase their work productivity, but they are generally happier. In a recent study from the University of Chicago School of Business, the research found that happiness depends more on opportunities to make decisions (i.e., freedom) rather than money or connections. This means that the ability to make decisions leads to more and better opportunities for success, which improves your quality of life. In other words, the better a decision-maker you are, the happier and more successful you’ll be.

This concept goes against what many business leaders believe – that it’s what and who you know that makes you successful. In fact, how you understand and solve problems that are the key to success.

Fortunately, problem-solving and decision making are skills that can be improved upon, studied, and mastered. By learning specific problem-solving and decision-making techniques, you can see problems sooner and make decisions faster. This allows you to make more confident decisions in your job and gives you more control over the happiness and productivity in every part of your life.

Critical Thinking in the Decision Making Process

Critical thinking is the practice of methodically gathering, analyzing, and evaluating information. It is one of the most vital parts of the problem-solving and decision-making process, as it is the act of clearly thinking through options that will lead to a final choice. While decision making is the process that leads to actionable conclusions, critical thinking is the element that defines whether the choice is sound. Think about it this way: If problem-solving is the car that gets your business to its goals, critical thinking skills are the gas.

Although humans have been thinking critically since the first Homo Habilis picked up a stone tool, critical thinking as a process has only become one of the most valuable business skills in the last century. John F. Dewey, the inventor of the Dewey library system and a noted educational philosopher, began touting the importance of teaching critical thinking skills in his 1938 paper, Logic: The Theory of Inquiry . This educational reform may have inspired the rising generation to explore the concepts more, as a resurgence of interest in the subject presented itself between 1950-1970. Many new decision-making strategies (relying heavily on critical thinking career skills) were created over this time period, including CATWOE, PEST, and the Cause and Effect Analysis model.

Since that time, critical thinking and decision making are synonymous with business skills expected of corporate leaders. Still, many people don’t truly understand exactly the underlying concepts that make critical thinking an effective process. There are four key structures that all critical thinking is based on:

Logic – An individual’s ability to see direct relationships between causes and effects. This is one of the most important decision-making skills, as logic provides accurate predictions about what kinds of effects a potential solution will have on individuals and systems.

Truth – The unbiased data of an event. Unbiased and unemotional facts are an important part of the problem-solving process. Good critical thinking culls out these biases and focuses on the historical and documented data that will support the conclusion.

Context – A list of extenuating pressures and factors that will or should be impacted by the final solution. Critical thinking must consider the historical efficacy of similar solutions, decision-makers’ physical and abstract stressors, and the assumptions or agendas of different shareholders. All of these outside elements must be considered to engage in a critical decision-making process truly.

Alternatives – Potential solutions not currently in use. Ineffective critical thinking, the individual can consider new ways of approaching problems that meet real-world goals and are based on accurate, unbiased data. This is the case, even if alternative solutions are not used or when outside determinants are unexpected.

When you understand each of these underlying factors, you will become more aware of personal biases and be more engaged in the critical thinking process. Also, improving your necessary thinking skills leads to faster, more confident, and more productive decision making. The essential fuel of thinking is the secret ingredient that will drive your business’s success.

Are You Asking the Right Questions?

Thought leader Clayton M. Christensen observed that business leaders often think so much about action that they fail to consider why they are acting in the first place. Unfortunately, good action isn’t possible without considering the right critical thinking questions. Critical questioning allows you to clearly distinguish facts from biases, stakeholders from observers, and solutions from potential solutions. If critical thinking is the lens by which you see solutions, questioning is the telescope that gives that lens shape, structure, and purpose.

Since questioning is how critical thinking and decision-making are accomplished, consider whether you truly understand what a good question looks like. A good question will result in an actionable answer, usually one that provides additional information to reach a final solution. But, how can you formulate questions that do this?

There are a few ways to know whether the question you’re asking is a good one. If you don’t have good question-asking instincts, interrogate your initial question with a few of these.

1. Is Your Purpose Clear?

A good question is carefully designed to meet a particular goal. For example, instead of asking, “When can I meet with you?” a clearer questioner would ask, “Would you prefer to meet on Monday morning or Wednesday morning?” The narrower range of options encourages a quicker, more decisive answer, which can, in turn, be acted upon. To get the most actionable information possible, you need to have a distinct idea of the kinds of information you are looking for. You can then make your questions more intentional and directed as you come closer to what you are looking to know. Specific purposes of questions may include:

  • Definition: What does “work ethic” look like in our organization?
  • Comparative: What parts of our marketing strategy are different from our competitor?
  • Causal: If we invest in this new technology, what are some potential positive and negative outcomes?
  • Evaluative: What about this product is working for our consumers? What isn’t?

Knowing which types of questions to ask in each situation, you’ll have a more targeted discussion that leads to actionable answers.

2. Is The Question Framed Correctly?

Even with a clearly defined purpose, the question’s framing can still help or hinder its overall effectiveness. For example, asking, “Why should we invest in a Halloween party when clown costumes are so expensive?” will not be as effective as “Why should we invest in a Halloween party when, historically, they have not improved business culture?” The first question suffers from its poor framing, as it assumes that a Halloween party must include the investment in a clown costume. Poorly framed questions can be identified through various smaller issues, including false comparisons, false dilemmas, and ambiguity. A good question deals with only one issue and avoids bundling disparate concerns into a single blanket assessment.

3. Is Your Question Closed or Open?

One of the questioning process’s biggest pitfalls is asking questions with a predefined or “closed” set of answers. These yes or no questions don’t require synthesis, analysis, or evaluation of facts. They are often asked by leaders who already know the answer and have no interest in additional information. While these can be useful when only a handful of acceptable answers exist, they don’t lead to creative thinking or better management decisions.

In contrast, an open question requires thought and evaluation to answer. These questions can open the door to outside ideas and collaboration and lead to more productive conversations than closed questions. These questions are designed to bring additional information to light and often lead to a more in-depth understanding of the problem and potential solutions.

4. Are You Following Up?

Initial questions offer a vital starting point for any critical thinking and decision-making discussion. Unfortunately, some people stop there, and that can be the death knell of effectiveness and efficiency. To get the best answers, you must engage in a series of follow-up questions to support your initial inquiry.

Consider this question: “What are some areas we can cut to meet our yearly budget?” On its own, it will get you some information but may miss the crucial further discussion. Questions like “Who will be affected if we cut that department?” or “What will the impact of that departmental cut be on our production processes?” will provide additional actionable information and lead to smarter, safer cuts. In fact, the highly effective Five Whys system of problem-solving is built solely upon the idea of targeted follow-up questioning.

By incorporating effective questioning into your critical thinking equation, you will get clear answers that will help you to create actionable solutions.

6 Methods and Techniques for Problem Solving and Decision Making

Even with good critical thinking and questioning skills in place, it can be difficult to maintain problem-solving consistency. Organizations aren’t individuals but employ various people with different personalities, skill sets, and strengths, making solving group problems virtually impossible without a clearly defined framework. For that reason, many top-level organizations choose to incorporate a standardized problem-solving methodology. Not only does this provide the consistency a business needs, but it often leads to more focused and productive discussions. This newfound productiveness, in turn, leads to more actionable plans and clearly defined goals for success.

Even though these processes have mainly been designed for large organizations, organizations of any size can adapt these concepts to suit their needs. Large businesses, small businesses, and individuals can all benefit from these simple problem-solving and decision-making methods. They have proven to be effective at maintaining a structured problem-solving process regardless of the structures in which they see use.

6 Step Problem Solving Method

Although many have made variations on the 6-Step Problem Solving Method, the only research-based version of this methodology was invented by Dr. Sidney J. Parnes and Alex Osborn in the 1950s. After working with and observing high-level advertising employees throughout the brainstorming and implementation process, Parnes and Osborn recognized that creative people go through a series of stages as they create, organize, and choose good solutions for problems. Their findings were published in 1979 under the title, Applied Imagination: Principles and Procedures of Creative Thinking. In their original work, the 6-Step model was termed, “The Creative Problem Solving (CPS) Method,” and included these key segments:

  • Objective Finding
  • Fact Finding
  • Problem Finding
  • Idea Finding
  • Solution Finding
  • Acceptance Finding

These six segments were further organized into three key phases of problem solving: Exploring the Challenge, Generating Ideas, and Preparing for Action.

After Parnes and Osborn released these creative problem solving techniques, many different groups and businesses adapted them to fit their needs and organizational culture, providing a consistent framework for making daily decisions. One of these popular adaptations was created by Yale University, and includes an evaluative segment that provides for continual optimization of the final decision. This model also incorporates some elements from the Soft Stage Management model (SSM), which provides a seven-stage approach to problem solving. The Yale adaptation has been adopted by businesses and organizations worldwide, and includes these six steps of action:

  • Define the Problem
  • Determine the Root Cause of the Problem
  • Develop Alternative Solutions
  • Select a Solution
  • Implement the Solution
  • Evaluate the Outcome

Comparative Decision Making – Another situation in which the 6-Step Model shows its strength comes when comparing the efficacy of your organization’s ideas against a competitor. The method’s group-think structure allows for a logical discussion of potential best-case and worst-case scenarios resulting from each potential course of action. Not only is this a good thing when formulating new ideas or action plans, but it works magnificently when determining strategies to take in a competitive marketplace. The method’s evaluative phase allows for research and comparison with outside ideas and models, such as those of major competitors, which eventually will lead to a better product or idea.

Long-Term Restructuring – This model deals particularly well with long-term changes or processes in need of consistent evaluation and restructuring. Since the evaluation process leads back into the initial phases of defining problems and developing solutions, the method develops a circular flow that allows the user to tackle even the most daunting decision-making projects. It also adapts to the size of the project or system in which it is used, so as a small project or system gets larger and more complex, the 6-Step model remains effective and can even be applied to individual components and subsystems as necessary.

PEST – Analysis Political Economic Social Technological

Noted as one of the most widely-used decision-making techniques, the PEST model derives from the concept that several influencing factors can affect an organization, namely Political, Economic, Social, and Technological factors. By carefully analyzing and evaluating these factors, organizations can make more informed decisions and better understate choices for long-term implications.

The PEST model of decision making was introduced by Francis J. Aguilar, a Harvard Business professor. In 1967, he published a book including the PEST model (originally the EPST model) entitled, Scanning the Business Environment. Arnold Brown reorganized the acronym STEP (Strategic Trend Evaluation Process) sometime after the book’s publication. It was adapted further by several authors in the 1980s into acronyms including PEST, PESTLE, and STEEPLE. It is still well-known by some of these alternative nomenclatures, and each retains the core elements of the system introduced by Aguilar.

Although it was originally designed to understand the business arena’s unique layout, PEST quickly became a consistent way for leaders to understand both the internal and external pressures that affected their organizational processes and products. It can also be easily adapted for acquisitions and mergers, potential investments, and marketing campaigns. After decades of its use, the PEST model has proven to be especially effective in these specific situations:

Surveying Business Markets – Since this was its initial function, PEST functions best as a market surveying tool. The four key elements of the model can easily be adapted to any market, regardless of size or scope. The permutations of the model, like PESTLE, include additional pressures that help to understand further the potential marketplace, such as legal and environmental factors. This makes the PEST model perfect for political ventures, building projects, or even human resource concerns.

Evaluating Strategies or Markets – Another area in which the PEST model shines is evaluating current strategies for flaws and inconsistencies. Because the model structures itself around rigorous evaluation, it allows all decision-making team members to have a clear idea of the chosen course of action’s potential impaction. By adding a weighting system to each of these elements, those in the discussion can clearly see which strategies have the greatest potential for success and meet their goals. Such a system also figures in strongly when comparing markets or courses of action. It results in data points to illustrate the projected gains and losses for each potential solution.

Large-Scale Change Including Complex Elements – Finally, the model allows for a methodical consideration of various influences so that large-scale change can be managed in advanced and intricate detail. The PEST method highlights weaknesses in potential mergers or campaigns, allows for detailed speculation about future partnerships or markets, and gives insight in each action course the regulatory or political drawbars. Applying the PEST model makes it relatively easy to create a concise checklist of items to be addressed. This makes it one of the most actionable decision-making tools for corporate-level change.

SWOT Analysis – Strengths Weakness Opportunity Threats

The SWOT model of analysis sets out to help businesses analyze their company and better understand the arenas in which they operate. In this method, the Strengths, Weaknesses, Opportunities, and Threats of a company are outlined in a grid fashion, allowing the leadership to identify toxic processes and behaviors quickly.

Albert S. Humphrey usually receives the credit for creating the SWOT framework, as he presented it during his work with Stanford. In reality, the concept may have originated earlier than his 1960s presentation of the concept. Several researchers, including George Albert Smith, Jr., C. Roland Christiensen, and Kenneth Andrews of the Harvard Business School, reportedly worked with a concept prototype during the 1950s. Their model, published in 1965 as Business Policy, Text and Cases, had a slightly different set of values: Opportunities, Risks, Environment, and Competition. This research likely held some sway over the Stanford research model, which Humphrey initially referred to as SOFT Analysis (Satisfactory, Opportunity, Fault, and Threat). Researchers Urick and Orr changed this to SWOT by 1964, and the name stuck.

SWOT lets users evaluate potential business risks and rewards for business ventures based on environmental pressures. Like other models, SWOT also lends itself to discourse that leads to making better decisions. Though it doesn’t work very well as a standalone decision-making model, it makes an excellent supplement to another more action-based system. Some of the situations where SWOT really shines include:

Brainstorming and Strategy Building – SWOT lends itself to sharing and discussing potential benefits and drawbacks of a single idea or course of action. Its simple format also plays well for situations involving big picture ideas and concepts. At the planning stage, it makes large issues readily obvious and illustrates key benefits for each idea. When deciding on the strategy for a particular product, plan, or business, SWOT can make an organization’s position and the benefits of each situation acutely obvious. A plan that has a strong strengths-opportunities correlation will support an aggressive strategy, while a plan that has a strong weaknesses-threats connection should be approached defensively.

Business and Product Development – The SWOT matrix’s simplicity is perfect for quickly identifying a business or product’s strengths and weaknesses. This model helps encourage discussion about the competitive advantages or gaps in the capabilities of a specific idea. It also helps bring to light clear threats for a course of action, such as political, technological, or environmental pressures that must be overcome before progress can be made. And, because it is such an adaptable model, it can be used for large-scale and small-scale problems. This flexibility makes SWOT a good choice as a standardized decision-making tool.

Gathering and Organizing Data – SWOT can be a good choice at the brainstorming level of creative problem solving, but can also prove itself an excellent tool during the researching phase of a task. The simple matrix can help present and organize data in preparation for action. Also, it can easily show where research is lacking or where more information needs to be gathered.

FMEA Analysis

As one of the first systematic techniques for observing organizations’ weaknesses, the Failure Mode and Effects Analysis (FMEA) system often see used as a diagnostic tool for companies and other large groups. FMEA puts forth the idea that all of the elements of a structure have inevitable failure modes, which are points at which they will break down under stress or over time. Then, the goal of FMEA is to identify the probable failure mode for each component and project the impact that these failures will have on the overall success of the plan.

The US military and surrounding industries began using this method as early as 1949 to identify potential military equipment and weapons weaknesses. Adopted in the early 1960s by contractors working with the U.S. National Aeronautics and Space Administration (NASA), FMEA helped these organizations produce parts and processes that would guarantee a high success rate shuttle program. In 1967, the Society for Automotive Engineers (SAE) published a version of FMEA, which, with revisions, has remained the standard failure mode model for the public aviation industry. Versions of FMEA have been used by the Automotive Industry Action Group, the U.S. Environmental Protection Agency (EPA), and the Food and Drug Administration (FDA).

Henry Ford was the first leader to widely incorporate the FMEA model to identify process weaknesses within a business. He adapted the FMEA model into two main areas: Process FMEA (PFMEA) and Design FMEA (DFMEA). PFMEA helps leaders to identify potential breakdowns of production, supply, and market failure for an organization, while engineers and other technical personnel use DFMEA to assess the ramifications of potential weaknesses and safety issues in their designs. The areas in which these two types of FMEA are most effective include:

Manufacturing and Assembly Processes – The initial goal of the FMEA model was to identify problems and potential failures of elements within a manufacturing process. Because of this, the FMEA model is a good choice for businesses that are heavily involved in manufacturing and production. It guides the participant through each point of the production cycle and allows them to foresee potential risks associated with parts, labor, and processes. Often, this results in fewer risks and unnecessary redundancies, which leads to a safer work environment and a more cost-effective business.

Business Strategy – Another area in which FMEA is highly efficient in any major change preparation stages. This model focuses on potential risks at every point in the new process, motivating leaders to understand and overcome challenges long before they arise. If a clear goal or emphasis is not established before beginning the FMEA process, this can become overwhelming and even paralytic, encouraging stagnation within a company. By assigning a Risk Priority Number (RPN) to each failure mode element, those using this model can make it much more obvious which failure modes require immediate attention.

Customer Satisfaction and Safety – Both PFMEA and DFMEA can help bolstering customers’ satisfaction and well-being. As processes are analyzed and evaluated closely, organizations become quicker and more cost-effective, often without sacrificing the final product’s quality. Because process flaws are identified and eliminated before taking the product or process to the customer, dissatisfaction becomes much less common. The DFMEA portion of the process becomes more reliable and safer as the model has applied time and time again, leading to higher employee retention and more loyal customers.

Soft Systems Methodology (SSM) is a decision-making process designed to tackle real-world problems with no formal definition or scope. In this system, users must consider six areas in order to solve these kinds of soft system problems:

  • Transformation
  • Environmental Constraints

CATWOE systematically incorporates these elements into a discussion about potential actions, looking at how these actions will influence the major players in a transition or other major problem. Originally developed by Peter Checkland and Brian Wilson, this problem-solving system has been constantly assessed and improved through continuing action research over the last 30 years. Initially, it was designed in response to the systems engineering approach to management problems. In 1966, a team of researchers at Lancaster University led by Gwilym Jenkins found that the systems engineering approach only worked when a problem could be clearly and narrowly defined. In cases wherein no clear definition was available, they found that the system was not effective for solving real and complex management problems. With Checkland and Wilson taking the lead, the SSM model was established. CATWOE was the problem-solving format that arose from their research.

CATWOE, by definition, works most effectively when it is being used to manage complex, real-world management problems. This broad approach means it can assist in solving virtually any issue that is not easily defined. However, some organizational situations still lend themselves more to CATWOE than other commonly accepted models, despite this adaptability. Some common CATWOE-friendly issues include:

Implementing Solutions – The CATWOE method also presents some strong tools when preparing to take action steps. Because CATWOE focuses on considering the influencing factors, people, and environments that will be integral to a solution, this method ensures that all of those elements are in place before the implementation. CATWOE also assesses each team member’s roles in the change, breaking individuals down into broad categories such as client, actor, or owner. Since these roles are defined in the CATWOE structure itself, each person has a better idea of how they contribute to the project’s success and can be easily held accountable for their responsibilities.

Cause and Effect Analysis

In Cause and Effect Analysis, also called Fishbone Diagrams or Ishikawa Diagrams, thinkers assess a single effect in an attempt to find its potential causes. During this four-step model, participants identify a problem, work out the involved factors, identify potential causes, and analyze the final diagram in preparation for action.

This problem-solving model was created in 1968 by University of Tokyo engineering professor Kaoru Ishikawa, although the Cause and Effect Analysis framework dates back to the 1920s. It was first included as one of the Seven Basic Tools of Quality Control, which W. Edwards Deming presented to post-war Japanese engineers, including Ishikawa himself. Of these seven tools, Cause and Effect Analysis deals with critical thinking the most extensively and uses compartmentalization and categorization to define which influencers contribute to the effect in question and how.

Each industry often develops its own unique set of categories that can be used with the Ishikawa design. The manufacturing industry, for example, uses the six Ms (Manufacturing, Method, Material, Man Power, Measurement, and Mother Nature), while the service industry uses the five Ss (Surroundings, Suppliers, Systems, Skills, and Safety). These categories are often used in conjunction with the Five Whys methodology for questioning, making the root causes of any effect clearer.

The Cause and Effect Analysis model has held sway for a long time thanks to the instances in which it outperforms many newer models. The most effective implementations include:

Group Decision Making – The Cause and Effect Analysis model works best with a key group of invested stakeholders, preferably from each of the main categories that the diagram will incorporate. This allows for the most in-depth analysis of the root causes of a problem from most people’s perspectives with that aspect of the business. The Cause and Effect Analysis model also lends itself to a discussion and can uncover fine details that may be closely connected and make analysis better. This happens most often in a group setting, where multiple members can become aware of the correlations of seemingly disparate parts of the business process.

Clearly Defined Problems – In complete opposition to decision-making models like CATWOE, which deal with ill-defined, nebulous issues, this model works best with concrete, tangible problems. This decision-making method starts by defining the problem, and without defining a problem clearly, the Cause and Effect model begins to break down. If the effect is vague or misunderstood by team members, analyzing its potential causes can be difficult. Framing is essential to effective use of Cause and Effect Analysis, as problems like “68% Employee Turnover” can be much more efficiently dissected than “Employees Unhappy.”

Complex, Interrelated Effects – Where this method really shines is in arenas where effects may have multiple, interrelated causes. This makes the Cause and Effect Analysis model perfect for large institutional changes like mergers and acquisitions. Even on a small scale, this method does a stellar job of highlighting how seemingly unrelated processes or production elements affect one another. Much like the PEST model, the Cause and Effect Analysis model assesses each segment of business operations that could change the outcome. This gives each stakeholder insight into the small changes that can be made within their part and helps them understand what might make the process or product more efficient and productive.

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Problem-Solving in Business: PROBLEM-SOLVING DEFINED AND WHY IT IS IMPORTANT

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How do Great Leaders Solve Problems in Business?

How-Great-Leaders-Solve-Problems

Category: Behavioral Economics .

Companies today are expected to adapt and respond quickly to challenges in a rapidly changing business environment. Notwithstanding sound planning and flawless strategy execution, businesses can still face problems. While they foresee some of those problems, others can pop up unexpectedly. These unforeseeable problems make it essential for businesses to be agile enough to respond to those challenges quickly and have excellent problem-solving skills to navigate them successfully. Problem-solving is an indispensable part of business management.

In this article, we will examine the following in detail

Introduction

  • Understanding the Importance of Problem-Solving in Business
  • Types of Business Problems
  • Challenges in Problem-solving
  • Skills Required for Effective Problem-solving in Business
  • A Step-by-step Process to Problem-solving in Business

TL;DR Version

Problem-solving is integral to business success, dealing with diverse issues ranging from operational hiccups to strategic challenges. Identifying and understanding these problems is vital, but navigating potential obstacles during problem-solving, such as cognitive biases, resource constraints, and lack of information, is crucial.

Effective problem-solving skills include research and analytical abilities, creativity, decision-making, communication , time management, and leadership. These skills allow business leaders to dissect complex issues, ideate innovative solutions, make informed decisions, communicate effectively, manage time, and lead teams toward resolution.

The problem-solving process involves defining the problem, understanding its root cause, collecting relevant information, brainstorming potential solutions, evaluating these solutions, choosing the best one, developing and implementing an action plan, monitoring progress, evaluating results, and reflecting on the process for continuous improvement. This iterative process ensures that businesses are resolving immediate issues and refining their problem-solving mechanism for future challenges.

Unmanaged and unmitigated problems can cause severe consequences to businesses. They can lead to project delays, missed deadlines, and financial losses. Moreover, they may negatively impact employee morale and customer satisfaction and even damage the reputation of the company. So businesses must have strong problem-solving abilities.

When businesses have strong problem-solving abilities, they can quickly and proactively rise to the occasion and address the problems, minimizing their impact, preventing them from escalating into bigger problems, and capitalizing on opportunities that arise from those challenges. Ultimately, the problem-solving ability of a company can help them gain a competitive advantage.

To solve problems and fix issues, companies require leaders who can handle complex issues with ease and guide and motivate their teams to identify problems and develop creative solutions to overcome them. They can leverage the collective expertise and experience of the employees to make well-informed decisions that align with the business goals and objectives. Leaders also work with employees to foster a culture of problem-solving to help the company build a resilient business that can thrive in today’s dynamic business environment.

What is Problem-Solving in Business?

Problem-solving involves identifying, analyzing, and resolving issues or challenges arising during various business operations to achieve the desired outcomes and business goals. It involves a systematic approach to defining the problem, gathering relevant information, generating possible solutions, evaluating them, and implementing the best course of action.

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we Cannot solve our problems with the same thinking we used when we created them. Albert Einstein

Why is Problem-Solving Important?

Problem-solving in business is important because of the following reasons.

1. Efficiency

Problems not only hinder progress but also reduce the efficiency of your operations by bringing everything to a halt/slowing you down, causing downtime, and costing you precious productivity. When left unchecked at the initial stages, these problems may also demand additional resources and budget to solve them, leading to cost overruns, losses, and inefficiency. So addressing the problems on time can help achieve efficiency.

2. Profitability

Profitability is one of the topmost priorities of an organization. So any impact on profitability is seen as a problem that requires immediate attention. Effective problem-solving helps businesses identify and address cost inefficiencies, optimize processes, and capitalize on new opportunities, thus improving the bottom line.

3. Leadership

Great leaders emerge during testing times. They can lead the employees, leverage collective effort and give a sense of direction toward finding solutions and workarounds. Problem-solving helps companies identify the right leaders.

4. Teamwork

Problem-solving requires team effort and participation. It calls for collaboration and communication between various departments, teams, and individuals. When companies manage to weather challenges and solve problems effectively, it brings the employees together to work towards a common cause, build stronger teams and create a habit of continuous improvement.

teamwork

5. Innovation

Problem-solving requires creativity and innovation to find solutions and workarounds. When a company fosters problem-solving culture, it automatically imbibes creative thinking and innovation. It gets reflected in developing new products, services, processes, and best practices.

6. Customer Satisfaction

Customer satisfaction helps businesses retain and find new customers. Problems with the products/services and customer support can lead to poor customer experience. Effective problem-solving helps businesses resolve customer complaints and issues quickly and satisfactorily, thus increasing customer loyalty and retention.

The Problems that Businesses Face Today and how they Solve Them

There are several different kinds of problems that businesses face, including

1. Strategic problems

Strategic problems are related to the long-term direction of a business. They typically involve decisions about resource allocation, product strategy, choosing the market, pricing strategy, product positioning, etc. Solving strategic problems requires a long-term vision, able leadership, and the ability to forecast market trends.

solution-concept

Business problem examples

Selecting the markets.

Businesses need to decide their focus on specific geographic markets, target customer segments, and product categories. They must make these decisions and select the focus areas by analyzing the data and insights into factors, including market size, competition, and the company’s core competencies.

Product development

Developing new products enables companies to remain relevant and achieve leadership in a highly competitive market scenario. They have to meet the customer requirements and provide a compelling reason for customers to purchase them. Solving the problem of new product development requires creativity and innovation and allocating resources for R&D. New products should be developed based on sound market analyses of customer requirements and pain points.

For instance, the need to learn and upskill anytime without compromising work hours pushed the companies to create e-learning platforms.

Positioning the company

Differentiating your business from the competition involves developing a strong brand identity, focusing on a specific niche or segment of the market, or offering unique value propositions. Setting the company apart by gaining a competitive advantage attracts customers. You can solve the problem of positioning your company by doing a SWOT analysis, finding your strengths and unique qualities that enable you to meet the customers’ requirements and address their pain points. You can base your brand identity, USP, and niche on your stand-out qualities that benefit customers. For instance, Volvo positions itself as the company that makes the safest cars in the world.

2. Operational problems

Operational problems are daily issues that hinder companies from efficiently delivering products or services to customers, affecting their ability to meet deadlines and targets. These problems arise from bottlenecks, inefficiencies, and system flaws. Addressing them involves identifying issues, providing employee training, upgrading technology, ensuring product testing and quality control, and implementing contingency planning, deadline management, and risk mitigation.

Operational-problems

Business problem-solving examples

Supply chain disruptions.

Supply chain disruptions happen when businesses face challenges in sourcing raw materials or components, leading to production delays or quality issues. For instance, during the pandemic, companies faced chip shortages, which led to losses and the inability to deliver products to customers on time. It also caused a rise in demand and an increase in prices.

Quality control issues

Quality control issues occur when design flaws or manufacturing issues impact the products. Businesses may need to identify and address quality issues to maintain customer satisfaction and loyalty. For instance, it is not uncommon to recall new automobile models, sometimes the ones from specific batches, to replace faulty components with redesigned parts before they might fail.

Managing staffing levels

Fluctuating staffing needs are part of operational issues. At any given time, if a company is understaffed, it can lead to operational inefficiency; if it is over-staffed, the company will suffer from cost infficiency. So, it requires careful planning. You can address the problem by either recruiting or downsizing and restructuring. For instance, the tech companies that designed software solutions for remote and hybrid work environments hired many employees during the pandemic. After the pandemic, when the need for these software solutions decreased, they had to downsize their workforce in light of the impending recession.

3. Financial problems

Financial problems are issues involving managing cash flow, revenue growth, and expenses. They are related to the financial health of a business. Businesses can fix them by managing costs effectively through process improvement and cost-cutting measures.

iterate_faster

Managing cash flow

Businesses must ensure that they have enough financial resources on hand to meet their obligations, such as payroll, vendor payments, logistics, managing retail channels, etc. For instance, many start-ups stall despite successful product development and prototyping, as they fail to secure adequate funding to bring the products to the market.

Identifying new revenue streams:

Businesses that focus on a particular niche are always vulnerable to competition and changing market conditions. They need to diversify their revenue streams to maintain growth and profitability. They may have to focus on research and product development to identify new revenue streams. For instance, some of the most successful and established DSLR camera manufacturers faced a major crisis when mirrorless cameras started eating into their market share. They had to revise the product strategy, downsize their manpower, and invest vast resources into developing competitive mirrorless systems to mitigate the company. On the contrary, DSLR manufacturers with diversified businesses remained more resilient.

Managing costs

Businesses must control expenses to maintain profitability. It may involve identifying areas where costs can be cut or negotiating better deals with vendors. For instance, Google is known to initiate moonshot projects. At the same time, they kill non-profitable projects quickly. It has helped the company retain leadership while managing costs judiciously.

4. Human resource problems

HR problems are issues related to recruiting, retaining, and developing talent. They are issues about the management of employees. Managing these problems requires assessing staffing needs, recruiting, restructuring, identifying training and upskilling needs, and retaining top talent through employee engagement initiatives, welfare measures, and career development opportunities.

Human-resource-problems

Retaining top talent

Retaining top talent can be a determining factor for the success of a company. Businesses must build an environment that attracts top talent by creating opportunities for career advancement and offering competitive compensation packages. For instance, highly specialized jobs with business-critical responsibilities, such as chief aero designers in motor racing teams, are hard to find and recruit. So retaining them is crucial for the success of the company.

Addressing employee morale and motivation issues

Lack of motivation, stagnant career, unfavorable team dynamics, etc., are some factors that cause a dip in employee morale. These factors can affect productivity and quality of work. Businesses must address these issues through employee engagement initiatives, career planning, team building, welfare measures, training, upskilling, etc.

Managing a diverse workforce

In an increasingly globalized work scenario, businesses must ensure that they create a work environment that is inclusive and welcoming to employees from different backgrounds and with diverse skill sets. They should also manage hybrid and remote work to address ambiguities and ensure clarity and synergy among teams and individuals based in various locations. For instance, many companies reserve certain positions for people of different racial/ethnic backgrounds or genders to meet their diversity goals. They also put policies and systems in place to prevent/address discrimination in the workplace.

Marketing problems

Marketing problems are related to promoting and selling a company’s products or services. Problems usually arise in understanding customer behavior and preferences and developing marketing strategies that appeal to those customers. Solving marketing problems requires revisiting the marketing strategy, understanding customer needs and behaviors by analyzing data, positioning the products more appealingly, and branding them better to reflect the strengths of the company and its product offerings.

Understanding customer needs and behavior

Customer needs to dictate the direction of product development and positioning. To design and deliver successful products, businesses must gain a deep understanding of customer needs, preferences, and pain points. For instance, the Japanese car makers capitalized on the high gas prices during the oil crisis and managed to capture the market in the US with their more efficient and reliable cars. The sudden loss in interest in the large, thirsty cars caused a considerable shift in the market, allowing Japanese car manufacturers to position their products in line with the customers’ preferences and succeed.

Developing a strong brand identity

Businesses must create a brand identity that resonates with the customers and sets them apart from competitors. For instance, it is common for companies to change their logo and brand identity in line with the changing trends, customer preferences, and product strategy.

Identifying new marketing channels and tactics

Businesses must be able to identify and adapt to changing customer preferences and identify new channels and tactics for reaching those customers. For instance, many retail businesses have adopted an eCommerce strategy to cater to mobile-savvy customers and to reach new markets.

Skills-Required-by-Business-Leaders

What Skills do Business Leaders Require for Effective Problem-Solving?

Following are some of the skills required for effective problem-solving in business.

1. Research and analytical skills

Problems have various potential implications. Trying to solve them straight away without doing proper research can cause further problems. Business leaders should study the problem to gain a deeper understanding, assess the solutions thoroughly, and test them before deploying them. They also need good analytical skills to review the performance metrics that indicate the problem areas and analyze information and data to understand the problem. Analytical skills help business leaders break down complex problems into smaller, more manageable parts, identify their root causes, avoid bounded rationality in decision making , and develop effective solutions and creative workarounds.

2. Creativity

When the problems are complex and multi-dimensional, they may require unique solutions that never existed before. Finding solutions for these problems requires creativity and a culture of innovation in the company. Business leaders must think creatively and tread unconventional paths to create innovative solutions. For instance, during the pandemic, when customers did not want to take the risk of going to retail stores to buy things but were reluctant to pay for the high shipping costs involved in e-commerce, retail businesses offered solutions such as BOPIS that let customers order online and collect their purchases safely from collection booth/kiosk at a convenient time. It helped them meet customer needs by offering the best of both worlds

3. Decision-making

Effective problem-solving in business requires sound decision-making skills. Problem-solving often involves making choices and tough decisions. For instance, the decision to axe a product line that has performed well in the past but has no future potential is a tough one to make. But retaining it will cost resources and yield decreasing returns. Great business leaders evaluate multiple options/solutions and make decisions in the company’s best interest. Being decisive or having decision clarity also means making the right decisions at the right time. Delays in decision-making can cause severe consequences even if you ultimately make the right decision. So business leaders must analyze everything and make the right decision when it matters the most.

4. Communication

Business leaders cannot single-handedly solve problems. Problem-solving requires a team effort. Good business leaders harness the potential of every employee with their communication skills and excellent coordination. They communicate effectively with colleagues, customers, and stakeholders to identify problems and develop solutions. For instance, in a crowded restaurant, the chef needs to coordinate the kitchen staff continuously, check if they are doing their part efficiently, control food quality, and make sure that food is served at the right table as quickly as possible. Lack of communication from the chef can escalate into a full-fledged nightmare, where customers keep waiting for their orders, kitchen staff make mistakes and deliver poor quality food, and the waiters get the flak for not serving food on time. Such situations can ruin the reputation of the restaurant and lead to the loss of customer trust. So good business leaders must communicate and build synergy among the individuals within and among other teams to get work done effectively.

5. Marketing problems

Marketing-problems

6. Leadership

Problem-solving is about working with many individuals and bringing the best out of them. So business leaders need great leadership qualities to motivate and inspire their teams to work together and solve problems. For example, innovations come from the R&D department; they get incorporated into products by the product development team, and the products are positioned and promoted in the market by the marketing team. Great business leaders lead product development and deployment by coordinating with all these teams, getting their insights, considering their views, and making important decisions regarding product strategy, product positioning, and branding. Situational Leadership is essential to deal with shifting priorities. Leaders motivate the teams and guide them in the right direction. Without good leadership, a company cannot solve problems effectively.

A Step-by-Step Process to Problem-Solving in Business

Problem-solving in business is often an iterative process. So the steps involved may need to be repeated or revised as new information becomes available. Problem-solving usually involves the following steps:

  • Define the problem; include any present symptoms or effects.
  • Understand the root cause of the problem and find out how it impacts the business.
  • Collect all the necessary information related to the problem by analyzing data, conducting interviews, researching, and seeking input from others.
  • Brainstorm with the stakeholders and generate potential solutions to the problem. Encourage open communication, collaboration, and participation among team members.
  • Weigh the pros and cons, evaluate all the potential solutions, analyze the risks, and consider the feasibility of each.
  • Choose the best solution from the evaluated solutions and consider how it will impact the stakeholders, including customers, employees, suppliers, and shareholders.
  • Develop an action plan to implement the chosen solution, detailing specific steps, timelines, and responsibilities.
  • Implement the solution, monitor progress closely, adjust the plan, make changes as required, and communicate those changes to the stakeholders.
  • Evaluate the results, determine if the solution addressed the problem, assess its effectiveness, and identify any areas for improvement.
  • Reflect on the problem-solving process, and identify and document the lessons learned.
  • Consider how you can improve the process for future problem-solving efforts.

10 Steps-Guide-to-Business-Problem-Solving

Problem Solving Key Takeaways

Problem-solving is a critical skill for business success. It involves identifying, understanding, and resolving issues in various facets of business operations and strategy. Common obstacles during problem-solving can include cognitive biases, resource constraints, and lack of information. Business leaders must navigate these potential pitfalls to ensure effective resolution of issues.

Essential skills for effective problem-solving include research and analytical abilities, creativity, decision-making, communication, time management, and leadership. These skills enable business leaders to dissect complex issues, devise innovative solutions, make informed decisions, effectively communicate, manage time, and guide teams toward resolution.

Problem-solving is an iterative process that involves multiple stages, from defining the problem and understanding its root cause to brainstorming and evaluating potential solutions, choosing the best one, and developing and implementing an action plan. This process also includes monitoring progress, evaluating results, and reflecting on the process for continuous improvement. An effective problem-solving method is the root cause analysis method. Ultimately, successful problem-solving in business is not just about resolving immediate issues but also about refining and improving the problem-solving process to tackle future challenges more effectively.

Problem Solving in Business FAQs

Answer: The four types of problem-solving strategies typically include:

Trial and Error: Involves trying different solutions until the problem is solved. It’s often used when there are limited possibilities that can be explored quickly.

Algorithm: A step-by-step procedure that, if followed correctly, will always lead to the solution of the problem. It is highly logical and often used in mathematical problems.

Heuristic: A general problem-solving strategy that involves using rules-of-thumb or shortcuts. Heuristics may not always yield the perfect solution but can often lead to a satisfactory one in a reasonable time frame.

Insight: Sometimes also referred to as creative problem-solving. It involves sudden realization, a flash of inspiration, or an ‘Aha!’ moment that provides a solution.

  • What is an example of problem-solving in business?

Answer: A common example of problem-solving in business is addressing a sudden drop in sales. The problem-solving process would begin with identifying and defining the problem (drop in sales). The next step would involve researching and analyzing the issue to understand its root cause, such as market conditions, competition, or internal factors. Brainstorming for potential solutions could include improving the product, adjusting pricing, or enhancing marketing efforts. After evaluating and selecting the best solution, an action plan would be developed and implemented. Progress would be monitored, results evaluated, and the process reflected upon for future problem-solving efforts.

  • Why is problem-solving important in business?

Answer: Problem-solving is vital in business as it enables organizations to navigate challenges and obstacles that could hamper their growth and success. It allows businesses to identify issues, understand their implications, and devise effective solutions. This process not only resolves the immediate issue at hand but also helps prevent similar problems in the future. Moreover, effective problem-solving can lead to improved business processes, innovation, and a competitive advantage. It also plays a crucial role in customer satisfaction, profitability, and overall sustainability of the business.

  • What is the most important problem-solving tool for business?

Answer: There isn’t a one-size-fits-all problem-solving tool for all businesses, as the most effective tool often depends on the specific problem and the business context. However, one universally important tool is effective communication. Clear, open, and honest communication fosters better understanding of problems, facilitates brainstorming of solutions, and aids in the implementation of action plans. Other essential tools include data analysis tools (for understanding and diagnosing problems), brainstorming techniques (for generating solutions), and project management tools (for implementing solutions).

Great leaders possess a unique problem-solving mindset that enables them to navigate complex challenges in the business world. By following this step-by-step guide, you can cultivate these essential skills and unlock your potential for success. Remember, problem-solving is not just about finding solutions but also about fostering a culture of innovation, collaboration, and continuous improvement. Embrace the challenges, seize the opportunities, and lead confidently as you embark on your journey towards becoming an exceptional problem solver and a remarkable leader in the business realm.

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Why your business needs critical thinking.

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Cultivating critical thinking skills should be a top priority for any business that wants to succeed in today’s complex and rapidly changing world.

According to the World Economic Forum, “analytical thinking, creativity, and flexibility will be among the most sought-after skills” by 2025, yet few companies invest in such training.

Critical thinking is an essential skill that enables individuals to analyze, evaluate, and synthesize information to make informed decisions. In today's fast-paced, complex, and dynamic work environment, critical thinking is more critical than ever before. It is crucial for organizations to prioritize critical thinking skills among their employees to make well-informed decisions and stay ahead in the competitive market.

Critical thinking skills are needed in every business today.

Rapid technological advancements, globalization, and economic uncertainties have created complex challenges for most businesses. Critical thinking skills are essential to successfully navigating this complexity and uncertainty. Critical thinkers can examine challenges and opportunities three-dimensionally in the broader business context, and they can analyze relevant information to develop a plan of action to address it. Critical thinking enables employees to consider multiple perspectives and potential outcomes of different decisions, leading to better choices that are more likely to succeed.

The ability to evaluate information, data, and facts is important in making informed decisions. Employees who lack basic critical thinking skills may be prone to making decisions based on assumptions, biases, or incomplete information. That often leads to poor decisions. On the other hand, employees who possess critical thinking skills are better equipped to weigh options, analyze the pros and cons of each decision, and make decisions based on factual and reliable information. Such decisions can lead to better outcomes for the organization, resulting in improved productivity, increased revenue, and better customer satisfaction.

In addition to decision making, critical thinking is also essential to problem solving – a key capability for leaders every level.

In the workplace, issues can arise at any time, and managers must be able to identify, analyze and address these problems quickly and efficiently. Critical thinking skills can help leaders identify the root cause of the problem and evaluate different options to solve it. This process can lead to innovative and effective solutions to complex problems that may have otherwise been overlooked or dismissed.

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Finally, critical thinking is vital for effective communication in the workplace.

Employees who can analyze and evaluate information can communicate it effectively to their colleagues and superiors. Critical thinking skills enable employees to articulate their ideas, share their opinions, and offer constructive feedback, leading to improved collaboration and team productivity. Employees who lack critical thinking skills may struggle to communicate their thoughts effectively, leading to misunderstandings, miscommunication, and conflicts.

Businesses of every size must prioritize the development of these skills among their employees to enable them to make informed decisions, solve complex problems, and communicate effectively.

The cultivation of critical thinking skills in the workplace requires investment in training and development programs that equip employees with the necessary tools and techniques to analyze and evaluate information effectively. But the result will be a more efficient, innovative, and productive workforce that can navigate complex challenges and drive success for the organization.

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Important Project Management Skills in 2024

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Katie is a Chicago-based editor. She started her career writing and editing content about home warranty, renters insurance, homeowners insurance and other home services topics before transitioning to home improvement products. She has spent the last year and a half working at a software company, managing content about CRMs, project management tools and other tech topics.

Companies of every size and industry hire project managers to ensure their important work gets completed. But, what is a project manager? And, what do they do? 

Project managers do exactly what it sounds like — they manage projects. In particular, they plan a project from start to finish. They break the project into tasks, assigning a due date and owner to each one. The project itself can be anything from building a website to writing a policy. 

If project management (PM) sounds like something your business could benefit from, we at the MarketWatch Guides team have put together this guide. Keep reading to learn how to hire a project manager and what skillIs to look for in one.

What Makes a Good Project Manager?

Being an effective project manager requires a diverse skill set. Much of the job is people management and task management, so you need soft skills, such as problem solving, organization and leadership. 

Many project manager positions also require :

  • An associate’s or bachelor’s degree
  • A few years of experience in project management
  • A certification in project management

Must-Have Project Management Skills

As previously mentioned, project managers need soft skills as well as project management experience and certifications. Here is a closer look at these qualifications:

Communication and Collaboration

A project manager uses formal and informal touchpoints, such as group meetings, Slack channels and 1:1 check-ins, to ensure every team member knows the part they play in finishing the project. Open communication also creates a safe space for team members to discuss concerns, leading to fast and healthy conflict resolution. 

Leadership and Vision

The best project managers motivate their team members, guiding them toward the shared goal. However, it is not uncommon for distractions to occur, especially if a project spans multiple months or years. In that case, it is the job of the project manager to remind the team of the vision and refocus on it. 

Organization and Focus

The projects that project managers supervise have a lot of moving pieces. Over the span of the project, the manager must juggle multiple tasks at the same time and turn in deliverables by strict deadlines. To stay on top of everything, project managers might:

  • Write their daily priorities in a planner
  • Set reminders for meetings and deadlines in their calendar
  • Schedule regular check-ins to track cross-team progress

Resource Management

Every project has a budget. It is the responsibility of the project manager to manage that budget. They must allocate funds to different tasks and team members and log this allocation to stay on top of how much they have spent. They might also have other financial responsibilities, such as paying for team tools and approving staff paychecks.

Project managers learn these finance skills by taking a financial literacy course and/or shadowing an experienced project manager.

Time Management

Time management goes hand in hand with organization. Project managers are responsible for managing their own time as well as ensuring that team managers can do the same thing for themselves. 

Here are some tips that project managers use for themselves and their teams:

  • Eliminate distractions in the workspace (e.g., move to a meeting room for focused work).
  • Establish incentives for meeting deadlines (e.g., a 30-minute break to watch a YouTube video, a pizza party in the office).
  • Use a Gantt chart to track completed work and show upcoming deadlines.
  • Move and stretch every hour to give yourself a break and an energy boost.

Emotional Intelligence

Emotional intelligence is a broad term. In the world of a project manager, it can mean:

  • Forming professional relationships with team members to relate to them and understand why they work the way they work
  • Giving constructive feedback to team members but also celebrating their wins
  • Giving every team member in a disagreement a chance to explain their side
  • Staying level-headed when team members miss deadlines

Risk Management and Problem Solving

Roadblocks are inevitable, but it is the project manager’s job to keep the project on track despite them. Project managers can predict some potential roadblocks before they happen. For the ones they don’t see coming, they must ask themselves:

  • What is the problem?
  • Why did it happen?
  • How can we fix it?
  • How can we prevent it from happening again in the future?

PM Frameworks

Now, we get into the tangible, technical skills of project management. PM frameworks or structures are ways of organizing projects. Here are some of the most common ones:

  • Waterfall: The Waterfall method divides a project into tasks that must happen in order. You cannot move onto the next task until the previous task is complete.
  • Agile: The Agile framework breaks work into short sprints. Each sprint lasts two to four weeks with time for planning, implementation and review. This method is popular with project managers who work in the software development space.
  • Scrum: Scrum is a type of Agile framework. It works in a similar way to the basic Agile method, adding in a step for daily standups to check in on progress. 
  • Kanban: The Kanban method is a way of organizing and visualizing each step in a project. The visualization is called a Kanban board. It has a column for each step in the process. As an item moves from one step to another, you drag it to the next column.

PM Certifications

Similar to how teaching certificates prove to schools that prospective hires have experience in the classroom, many employers who hire project managers require certifications as verification of competency. Here are some of the most popular project management certifications:

  • Project Management Professional (PMP): The PMP is a certification you can get to prove that you are an expert in project and people leadership. It is offered by the Project Management Institute (PMI).
  • Certified Associate in Project Management (CAPM): The CAPM is another PMI certification. It proves foundational PM knowledge for workers who are just entering the workforce.
  • PMI Agile Certified Practitioner (PMI-ACP): Having the PMI-ACP certification acknowledges that you are proficient in the Agile methodology of project management. 
  • Certified ScrumMaster (CSM): The CSM is an entry-level certification that verifies your understanding of the basic Scrum principles. 

The Project Management Institute (PMI) is a membership-based organization. PMI creates a meeting place for professional project managers, with almost 1 million members in 200 countries . Because PMI is so well-respected and well-known, its certifications are some of the most trusted, which is why we included three of them in our above list.

PM Software

Software is the lifeblood of project management. Almost every project manager uses one to track the progress of their projects. Here are the software solutions that ranked the highest in our research:

  • ClickUp: ClickUp is a project management software with features for time tracking, document storage, brainstorming and more.
  • monday.com: monday.com does project management, but it also has features for marketing and customer relationship management (CRM).
  • Smartsheet: Smartsheet has a lot of specific and unique project management features, including automated custom workflows, views (e.g., Gantt, calendar, grid) and comments.

How To Develop Project Management Skills

Hard skills, such as getting certified and gaining experience, are the easiest ways into the project management field. Unlike soft skills, they are tangible to employers. Continue reading to learn how to develop these skills.

Getting Certified

To revisit the fundamental certifications from above, here is how to get them:

  • PMP: The PMP is a 180-question exam. The cost to take the exam is $405 for PMI members and $575 for non-members.
  • CAPM: The CAPM is a three-hour, 150-question exam. It costs $225 for members and $300 for non-members.
  • PMI-ACP: The PMI-ACP is a 120-question multiple-choice exam that costs $435 for members and $495 for non-members. 
  • CSM: The CSM is a one-hour, 50-question exam. It is offered by the Scrum Alliance for $360.

Gaining Experience

Once you have a CAPM certification, you can use that as leverage to get an employer to consider you for an entry-level project management role. A degree in a related field, such as business, can also help you land a PM job. Once you enter the PM field, you can put that on your resume as experience to use for future job applications.

The Bottom Line

The key to becoming a successful project manager is developing versatile soft skills and PM-specific technical ones. Prospective and current project managers who assess their strengths and seek education for their lacking areas are on the path to professional success.

Frequently Asked Questions About Project Management Skills

What are some examples of hard and soft skills for project managers.

Some examples of soft skills that project managers should have include problem solving, organization, time management and leadership. In terms of hard skills, project managers usually have previous experience in a PM role and/or one or more certifications in PM.

What makes an effective PM besides technical abilities?

An effective project manager has soft skills, including leadership, problem solving, communication, organization, resource management, time management and emotional intelligence.

What does a project manager do?

A project manager plans a project from start to finish. They break the project into tasks, assigning a due date and owner to each one.

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