problem solving in terms of business

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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 Is Problem-Solving 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 Do You Solve Business Problems Effectively?

There are many different problem-solving strategies, but most can be broken into general steps. Here is a six-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.

Use the Five Whys: When assessing a problem, a common strategy is to ask “why” five times. First, ask why the problem occurred. Then, take the answer and ask “why” again, and so on. The intention is to help you get down to the root cause of the problem so you can directly target that core issue with your solution.

2) Creatively Brainstorm Solutions: State every solution you can think of. Write them down. Seek input from those who possess in-depth knowledge of or experience with the problem you’re trying to solve. These insights will provide you with valuable perspectives you can transform into tangible and impactful solutions.

3) Evaluate Solutions and Make a Decision: Assess the feasibility of each solution. Is the deadline realistic? Are there readily available resources you can leverage to successfully implement the solution? What is the return on investment of each solution? If necessary, come up with alternative solutions or adjust the initial ones you brainstormed in step 2.

4) Make a Decision: Finally, make a firm decision on one solution. This final solution should clearly address the root cause of the problem.

Perform a SWOT Analysis: You can use a SWOT analysis to help you decide on the best solution. A SWOT analysis involves identifying the strengths, weaknesses, opportunities, and threats linked to a specific decision. With this framework, your team can assess a decision from various angles, thereby gaining a holistic view of it.

5) Take Action: Write up a detailed plan. This involves developing a comprehensive roadmap that outlines the steps required to implement your solution. The steps should specify milestones, deadlines, roles, and how to obtain the necessary approvals. To ensure accountability, your entire team should have access to this action plan. Each team member should be able to track and share their progress with the group.

6) Gather and Share Feedback: Problem-solving is not a “set it and forget it” process. It’s a dynamic journey that necessitates ongoing attention, deliberation, and refinement to achieve optimal results. Thus, periodic feedback is critical in validating whether the chosen solution creates the desired impact. It allows key stakeholders to check in and make any necessary changes.

What Are Problem-Solving Skills?

Problem-solving skills are specific procedures that can be used to complete one or more of the six 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 Can You Improve Your 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 taken the time to refine 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.

Enhance Your Problem-Solving Skills with CMOE

Problem-solving skills in business are not developed overnight. Developing then takes ongoing practice and the right guidance to get right. We encourage you to leverage CMOE’s Problem-Solving and Decision Making in the Workplace workshop to further develop your skills. We’ll help you identify new ways to solve problems methodically so you can create greater impact.

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Are You Solving the Right Problem?

Dwayne Spradlin

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

Reprint: R1209F

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

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

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

Establish the need for a solution. What is the basic need? Who will benefit from a solution?
Justify the need. Why should your organization attempt to solve this problem? Is it aligned with your strategy? If a solution is found, who will implement it?
Contextualize the problem. What have you and others already tried? Are there internal and external constraints to implementing a solution?
Write the problem statement. What requirements must a solution meet? What language should you use to describe the problem? How will you evaluate solutions and measure success?

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

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

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

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15 Problem Solving Strategies For Business

Table of Contents

Feynman Technique

5 Whys Method

Second-Order Thinking

Lateral Thinking

Value Stream Mapping

Fishbone Diagram

RFM Analysis

McKinsey’s Seven Degrees Of Freedom

Convergent vs. Divergent Thinking

Root Cause Analysis

Disney Method

Reverse Brainstorming

Eight Disciplines Problem Solving

Effective Problem-Solving Strategies

Feynman Technique : A method for learning and understanding new concepts by explaining them as simply as possible.
5 Whys Method : An interrogative technique to identify the root cause of a problem by asking “why” five times.
Second-Order Thinking : Assessing the implications of decisions by considering future consequences and possibilities.
Lateral Thinking : Approaching problems from unconventional angles to find creative solutions.
Value Stream Mapping : Analyzing and improving the delivery of products and services through flowcharts.
Fishbone Diagram : Identifying potential causes for a problem using a visual representation of cause and effect.
RFM Analysis : Analyzing customer behavior based on recency, frequency, and monetary value .
McKinsey’s Seven Degrees of Freedom : A strategy tool to prioritize growth opportunities for businesses.
Convergent vs. Divergent Thinking : Convergent thinking uses established rules to find solutions, while divergent thinking encourages innovative ideas.
TRIZ Model : A systematic problem-solving framework based on patterns in innovation and invention.
Root Cause Analysis : Identifying underlying factors causing a problem for effective solutions.
Disney Method : A parallel thinking technique using different roles to analyze problems and develop action plans.
Reverse Brainstorming : Identifying potential problems and obstacles to find innovative solutions.
GROW Model : A coaching model for goal -setting and problem-solving, focusing on goal , reality, options, and will.
Eight Disciplines Problem Solving : A method for product and process improvement, developed by Ford Motor Company.

User Manual to Problem-Solving Techniques

Other Frameworks:

Growth Strategy Matrix
Ansoff Matrix
Growth Hacking
Go-To-Market Strategy
Amazon Flywheel
Customer Obsession
Coca-Cola Franchained
Dropbox Self-Serving Model
Zoom Freeterprise
Business Strategy
Types of Business Models
What Is a Value Proposition?
What Is Business Model Innovation
Platform Business Models
Network Effects In A Nutshell
Digital Business Models

More Resources

About The Author

Gennaro Cuofano

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