Assembling data about the problem often begins with input from stakeholders, including employees, volunteers, customers, members, or the general public. Initially, the information may come from a suggestion box, a complaint, a notice from a landlord or a government agency, a survey, a quarterly or annual report, a newspaper or mass media story, a new book, or an academic article. Or it may come from an expert or a consultant.
Of course, any stakeholder can undertake his or her own research on the Internet. There are very few totally original problems that have no history and no data.
A quick example from the news is the hacking of credit card records at Target. This could pose a problem for any business that accepts plastic -- which would be every business. The Internet can be an especially useful source for data on such current event issues.
The sba.gov website, for example, includes an article on security that addresses the computer security problem, as well as several related problems. The article, by Caron Beesley, a small business owner, writer, and marketing communications consultant, begins as follows [italics added]: "How secure are your small business assets from fraud, identity theft and cybercrime? According to the Association of Certified Fraud Examiners (ACFE), companies with less than 100 employees lose approximately $155,000 as a result of fraud each year. Small businesses also have a higher fraud rate than larger companies and non-business owners. One of the most frequent sources of fraud is credit card abuse – largely due to the fact that few business owners actually take the time to go through every line item on their bill or choose to mingle business and personal accounts. Other sources of fraud stem from an overall lack of security across the business – such as inadequate network and computer security and a lack of background checks when hiring employees."
Analysis, Discussion, Negotiation, Re-Defining, Reporting/Proposing
Raw data is rarely useful in problem solving without analysis. In the example just cited regarding fraud against small businesses, annual losses are given as $155,000. But what does this number mean? How was this figure determined? Surveys? Tax records? Estimates based on prior years? Overall trends affecting all businesses large and small?
Obviously, the small business owner wants to know how serious this problem is for his business. That figure alone, without proper analysis, does not help him or her decide whether to address credit card fraud as a major problem requiring what might be expensive solutions (a new computer system or new software?).
What is the source? Is it reputable? Wikipedia, for example, is notoriously full of errors.
In the example above, the loss figure of $155,000 appears to be an average per small business. The total national figure emphasizes how very serious the problem has become:
"How much is fraud costing your business? What an Exclusive Study Reveals for 2010.
Now more than ever protecting revenue is important to your business. Retailers are losing over $100 billion in fraud losses each year, mostly due to identify theft and charge backs. To help effectively battle the fraud problem burdening U.S. retail merchants, LexisNexis® Risk Solutions teamed up with Javelin Strategy & Research to conduct a landmark study on retail fraud.This annual study comprehensively assesses the cost of criminal methods, industry solutions, and merchant needs."
After considering the accuracy of the data, there are other issues that arise. Is the data relevant to the problem at hand? In our example, the total number of Visa cards in circulation, or the fees charged by the credit card companies, or the average purchases in the holiday shopping season are useful pieces of data for business planning. But they are not applicable to the specific problem of fraudulent use of credit cards at small businesses.
Discussion: "Many heads are better than one," is one of those truisms that is actually true. Regardless of your situation -- whether you have a personal problem to solve, or are in a formal task force charged with problem solving, different perspectives are not only useful, they are essential. Everyone knows about his or her own blind spots, prejudices, automatic habits, hidden (even unconscious) agendas, and group think. These can lead one astray. But the solution to this problem is pretty simple. Get input from others with differing perspectives and knowledge and points of view. They will help balance all the ideas that may be distorted by your personal thought process.
This is one time when input, new ideas, and discussion come into the problem-solving process.Later, these will appear again during the topic of brainstorming.
Negotiation becomes necessary in any group problem-solving process where consensus is not reached quickly and easily. Consensus is not often easy and is always time consuming and energy draining. The answers to "What exactly is the problem we are trying to solve?" will vary dramatically from person to person. It is common sense that the salesman and the comptroller do not look at a drop in quarterly sales the same way.
One more time the problem solvers re-define the problem based on all of the research, discussion, and negotiation that has gone on before.
A. Human resources (including consultants, if available) Brainstorming will be discussed below, but one thing that can be said up front is that effective brainstorming usually requires a group. Seven people generating 10 ideas apiece during one session produces 70 ideas to consider. And often the group will produce even more. Thus, problem solving generally requires a commitment of staff time (and perhaps overtime).
In larger organizations, the problem-solving team may be assembled and led by an outside consultant. This situation clearly has some advantages, if it is managed well. The consultant is from outside the culture and can therefore "think outside the box" more readily.
The company's investing in a consultant suggests management is serious about solving the problem(s). If one is on the problem-solving team, he or she will not be wasting time in a pointless exercise, if the company has demonstrated its commitment to a solution by paying for a consultant.
The consultant, presumably, also brings in experience that translates into advanced skills, including, for example, those in problem solving, group leadership, time management, planning, and business strategy. An experienced consultant obviously adds value to a problem-solving effort in a new or start-up enterprise. A report from a respected consultant may be exactly what is needed to reassure investors.
B. Infrastructure, such as computers and access to the Internet, are obviously necessary in defining the problem, analyzing it, and developing solutions. Space may also be important. Having dedicated space and equipment boosts morale for the problem solvers, and may well improve their efficiency and effectiveness.
Limited access to confidential information may be an obstacle (even an insurmountable one). It is, therefore, very important at the beginning of the problem-solving effort to know what information, records, and data will be available, and what held back. Often there are very good reasons -- such as legal -- for keeping confidential material confidential. But it is best to know this at the start, so as not to create frustration and paralysis among the problem solvers.
C. Having an adequate Budget to get the job done is self-evident.
Uncovering the Root Problem
Brian Tracy, a highly successful business consultant and author of 32 books, describes a standard business problem in his book Change Your Thinking Change Your Life: How to Unlock Your Full Potential for Success and Achievement(2003). The company is having a problem with a new product because "sales are not high enough."
Tracy asks three basic questions to determine what the real problem is. "Is there a market? Is the market large enough?" Many, if not most, companies only get this far. It is the third question that often reveals the real problem. "Is the market concentrated enough so that you can advertise and sell to it in a cost-effective way?" When the answer to question three is "No," there is no way the company can make a profit on its investment, and it may even cause the whole company to fail. This illustrates the importance of going beyond the initial definition to find the root problem.
Tracy's suggested steps repeat two actions from the defining-the-problem material already covered. Why go over the same ground again? The presumption here is that there is new data,or more comprehensive data, that has not been considered before. That makes it worth revisiting that part of the process.
Step One: Assemble data.
Step Two: Analyze the data.
Step Three: Use personal experiences.
Step Four: Discover feelings and emotions.
Tracy's Step Three introduces an additional concept. It corresponds to a current theoretical trend in business management. According to this theory, using of outside expert consultants is often wasteful, and even counterproductive. The true experts on any business are very often the veteran employees of that business. They can serve as "inside" consultants and provide very valuable input.
This makes a lot of sense when considering problem solving. The team may very well have a member or members who have actually dealt with this problem (or a similar one) before. At the very least, he or she can describe previous solutions that were tried and did not work. This will save a lot of time and effort and, at the same time, encourage confidence and creativity in generating new and different ideas.
Step Four in Tracy's schema taps into yet another resource the problem solvers have to offer: their feelings and emotions. For example, a task force may be addressing an apparently intractable problem that has come up before. Employees who are parents or caregivers need flextime schedules to meet their family obligations. But the business is in retail and must maintain regular hours.
The store manager, therefore, always reacts negatively to requests to leave early. The manager becomes frustrated and angry, the employees resentful and fearful. It will be virtually impossible to solve problems related to scheduling employees unless the underlying emotions are brought up and dealt with.
Feelings and emotions also often arise with employees who are women or minorities. Sometimes, it is as simple as a cultural difference. This became very apparent when Japanese companies became major global forces in many industries, such as electronics and automobiles. American and European executives, salesmen, lawyers, customer service personnel, etc. had to adjust to a different rhythm in meeting a Japanese partner or customer.
The Americans might think that the Japanese were being too suspicious and too slow to reveal important information. This might lead to feelings of irritation, frustration, and even anger -- effectively blocking the trust needed for a successful negotiation. Thus, the root problem might not be the quality of the product, or the price, but rather the emotions generated in contract talks.
A very different way of considering feelings and emotions as resources in problem solving is to consider them as "intuitions," or "hunches," or "gut feelings." Those who believe that only logical-mathematical intelligence and hard data count, may well dismiss such input out of hand.
Remember that Homo sapiens are hardwired for survival, for making good intuitive decisions about dangers, or risks, or opportunities. Human beings have been very good at this kind of "analysis" for hundreds of thousands of years. And, much of the problem solving and decision making about finding food in a dense jungle, or escaping a predator by ducking under water, originated with gut feelings. Later, they became experiences (Tracy's Step Three) that could be remembered and taught; but first, they were feelings.
Any good, experienced salesperson is highly in tune with his or her intuitive read on how his or her pitch is going. He or she makes quick adaptations based on a combination of feelings and experience to close the deal. If the salesperson encounters resistance to a price increase (problem), he or she may "know" this is not the right moment for a deal. The customer may be under stress (feelings and emotions) that is getting in the way. The skilled salesperson may then suspend negotiations and set another appointment, when conditions will be more favorable for a successful contract.
Tracy's procedure, or a similar approach, is designed to uncover deeper aspects of a problem that may ultimately block a solution. The effort to do so at this point in the process is very likely to pay off later down the line.
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