There is a well-aged joke about a police officer encountering a man—possibly inebriated—who is walking around in circles under a street light late at night. The policeman watches for a while and finally asks, “Can I help you, sir?”
The man replies, “I am looking for my car keys. I dropped them someplace.”
The officer says, “Well, where have you looked?”
The man replies, “Just around here,” as his finger turns a circle.
“Well, where did you last have them?” the officer inquires.
“Over there, by my car,” the man points.
Dumbfounded, the officer asks, “Well why not look over there?”
Looking up, the man responds, “Because the light is much better over here!”
It's a tired joke, perhaps, but one with strong relevancy to the way problems get solved in business today. Often, even the best problem solvers spend too much time looking for solutions only where their particular “light” shines, meaning in those areas where they are the best informed or comfortable. For example, marketing managers may see challenges through marketing eyes and look for marketing solutions. Operations managers may try to solve problems by modifying operational processes and routines.
The same principle applies to virtually every business discipline. Unfortunately, most really important business problems simply aren't that well behaved. They tend to defy analyses that draw from a single discipline. They often involve a multiplicity of business issues with competing or conflicting objectives. Further, they do not have single, definitive solutions.
What, then, can a manager do to become a better problem solver? Excellent problem solvers tend to use certain common approaches or “habits of mind.” The following are five of the most critical habits.
Preparation. Problem solvers must have a reasonable mastery of a broad set of business fundamentals. They need to learn the basic terminology, concepts, frameworks and analytical tools used in business today. The core curriculum of any high quality business school aims to meet this need, enabling students to become quite adept at solving accounting, finance, management or marketing problems. While this essential background is necessary, it is not sufficient, however, to fully prepare managers for the kinds of problems that span disciplinary considerations and which require a more complex level of integrative thinking. Increasingly, modern business curricula also provide aspiring business leaders with courses, cases and experiences that equip them to effectively tackle these more complicated problems.
Analytical Dissection. The complexity of business problems comes, in large part, from the many issues involved which need to be examined from different disciplinary perspectives. Sometimes problems require consideration of competing or conflicting objectives. Effective problem solvers develop habits of decomposing problems into their core issues, analyzing each with appropriate frameworks and developing ways to resolve each issue.
For example, even a fairly basic decision such as determining an appropriate level of end product inventory requires a manager to consider at least two issues, cost and future sales. Holding inventory involves carrying costs, but stock-outs arising from insufficient inventory can impact sales. A good solution will simultaneously consider both of these issues. In contrast, a decision about an acquisition can involve scores of such issues, all of which should be considered in the final solution. Great problem solvers habitually question and probe their results to ascertain whether or not they have asked the right questions, identified the correct issues, or incorporated all the relevant facts and data.
Prioritization. The scope of many, if not most, complex business problems exceeds the capacity of firms to address every issue and all aspects of the problem simultaneously. Prioritization requires evaluating problems in light of what will be required from an adequate solution, and then weighing each issue against the difficulty, cost and impact of addressing it as well as the amount of time it may take to do so. For example, if a business is in a financial crisis, you might solve those issues that are most likely to produce enough short-term net revenue to alleviate the crisis and allow the business to survive long enough to address additional issues. The ability to determine the costs and benefits of a solution—as well as the timing—is a critical skill within prioritization.
Examination of Assumptions. Most complex business decisions require making assumptions about price and profit margins; size and share of the market; the responses of customers, employees and shareholders; and other factors. The adequacy of any solution usually rests heavily on these assumptions; consequently, it is necessary to ask how the solution and its effects will change if the assumptions on which it is based are not met. The most robust solutions are generally those which work under a range of assumptions.
Prior to committing to a particular solution, problem solvers should ask how an error in the assumptions would affect decisions made about the solution. Before committing to a solution, ask yourself, “How wrong can I be, and how does that change my answer?” If the answer is unacceptable, you should change the solution, reduce uncertainty about the assumptions, or both. Reflecting on the accuracy of your assumptions and the resultant risk in your proposed solution requires extra discipline, but the reward is a far higher level of confidence heading into implementation.
Consideration of Implementation. To be effective, a solution must be put into practice, and often the ideal theoretical solution has little chance of being implemented on time, if at all. Prior to finalizing their solutions, excellent problem solvers test their ideas for acceptance and commitment among those individuals and groups whose support is essential to effective implementation.
It is seldom possible to know for sure if the solution to a business problem will work in advance of trying it. There are no guarantees of success, regardless of approach. Consequently, problem solving requires the courage to proceed with a solution in spite of a degree of uncertainty about the end results. When problem solvers approach their tasks mindful that such problems defy simple analyses through a single lens, however, the likelihood of success increases. Through disciplined thinking that adheres to these five habits, managers have a better chance of identifying and addressing all of the important aspects of complex problems, developing good solutions to them, and mustering the confidence and courage needed for effective implementation.
—Ed Conlon is Associate Dean and Sorin Society Professor in the Mendoza College of Business. Viva Bartkus is an associate professor of management. Both teach courses in problem solving and consulting within the undergraduate and MBA curricula. They are currently putting the finishing touches on a new book with the working title The Art of Problem Solving.