Business Analysis Problem Solving Techniques
Why is problem solving important to the business analyst.
The expression problem solving refers to the intellectual process that people go through to uncover, analyse and solve problems. Problem solving is a major discipline within business analysis. You’ll often hear business analysts state that the thing they love about their work is solving problems. This makes sense because as a business analyst, your role is to identify and solve problems in an organisation.
Examples of Business Analysis Problem Solving
Here are some examples of problem-solving scenarios that a business analyst might face:
- Process Improvement: This is about improving a organisation’s manufacturing or operational processes. You would gather data on current processes, identify bottlenecks, and work with the team to design and implement a more efficient workflow.
- Decreasing Sales: You would be determining why a company’s sales have been decreasing. To solve this problem, you would analyse sales data, conduct customer surveys, and review competitors’ strategies to determine the root cause of the issue.
- Customer Retention: This where you would be be tasked with improving customer retention rates. You would conduct surveys to gather feedback, analyse customer data, and work with the marketing team to develop targeted retention strategies.
- Cost Reduction: You are asked to reduce costs for a company by analysing the budget, identifying areas where costs can be reduced without compromising quality, and work with the team to implement cost-saving measures.
- New Product Development: This is where you are asked to assist in developing a new product. You would conduct market research to determine customer needs, develop product specifications, and work with the product development team to ensure that the product meets customer requirements.
These are just a few examples of the types of problems that a business analyst may solve. The key is to approach each problem with a structured, analytical mindset and work collaboratively with stakeholders to find the best solution.
Process Improvement Example
To further expand on this here is an example of how you could could solve a process improvement problem.
Problem : A manufacturing company is experiencing delays in production due to bottlenecks in their production process.
- Define the problem: Gather data on the production process and identify the specific bottlenecks causing the delays.
- Analyse the process: Use process mapping tools to visually map out the production process and identify areas for improvement.
- Identify solutions: Work with the production team to brainstorm solutions to the bottlenecks identified in the process analysis. Possible solutions could include streamlining the process flow, improving the quality of raw materials, or upgrading equipment.
- Evaluate alternatives: Evaluate the potential impact of each solution and determine the most effective solution based on the resources available to the company.
- Implement the solution: Work with the production team to implement the chosen solution and monitor the results to ensure that the bottleneck has been successfully resolved.
- Continuous improvement: Continue to monitor the production process and make adjustments as needed to ensure that the process remains efficient and effective.
By using a structured approach to problem-solving, you can help the manufacturing company to identify and solve bottlenecks in their production process, resulting in improved productivity, reduced costs, and increased customer satisfaction.
Problem Solving Techniques
There are many techniques that you can use to help solve problems in a business environment. Here are some common tools that can be used for problem-solving. These techniques can be used in brainstorming sessions / workshops or as personal thinking tools.
This tool helps to generate new ideas and solutions to a problem by encouraging open discussion and collaboration.
This tool helps to visually map out the current process to identify bottlenecks, inefficiencies, and areas for improvement.
Root Cause Analysis
This tool helps to identify the underlying cause of a problem by looking at the relationship between various factors. Root Cause Analysis is another common technique and assumes that systems and events are interrelated. 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 grew into the symptom you are now facing. There are three basic causes of problems: physical, human and organisational.
The Five Whys
The Five Whys technique is simply the process of asking “why” enough times that you eventually get to the root cause of a problem. It is an effective way to solving problems that can be used by any business analyst to improve a business process or write better requirements. Learn more about this questioning technique in “Why” is the How of Getting to the Root Cause of a Problem .
This visual technique is used to outline information around a central word or phrase. This central concept may form the known issue that may be causing the problem. Learn more about Mind Mapping in How to Explore a Problem Using a Mind Map and 6 Strategic Categories .
This tool helps to identify the various factors that contribute to a problem by creating a diagram that looks like a fishbone. Like Mind Mapping, Fishbone Analysis is a visual technique for exploring a central problem or concept. This tool is also called the Ishikawa Diagram as it was first used by Dr. Kaoru Ishikawa of the University of Tokyo in 1943. Learn more about this technique in How to Identify the Likely Causes of a Problem with a Fishbone Diagram .
This tool helps to identify the strengths, weaknesses, opportunities, and threats facing a business.
This tool helps to identify the most important factors contributing to a problem by plotting them in a bar chart.
This tool helps to evaluate the costs and benefits of different solutions to a problem to determine the most effective option.
This tool helps to compare different options by evaluating various criteria and assigning weights to each criterion.
CATWOE can be used as a stand-alone tool or can be combined with other techniques to ensure that the identified problem has been given full consideration, i.e. you don’t have a problem statement that is really a solution instead. CATWOE allows you to look at the issue from a variety of perspectives: customers, actors, transformation process, world view, owner and environmental constraints.
These are just a few examples of the tools and techniques that can be used by a business analyst to solve problems. The key is to select the most appropriate tool for the specific problem at hand and use it to guide the problem-solving process.
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Table of Contents
Business analysts are such an essential element for an organization’s survival and success today. By using different structured business analysis techniques, these analysts help companies identify needs, root out flaws, and sift through a flood of data and options to find the right actionable solution.
We’re here today to explore some of the top business analysis techniques and how they are successfully leveraged for an organization’s success. There are many of these proven business analysis problem-solving techniques to choose from. Still, the ones highlighted here are the more commonly used methods, and it’s reasonable to infer that their popularity stems from their effectiveness. Here is the list of the top business analysis techniques:
Business Process Modeling (BPM)
Brainstorming, moscow (must or should, could or would), most (mission, objectives, strategies, and tactics) analysis, pestle analysis, swot analysis, six thinking hats, non-functional requirement analysis, design thinking, become an ai-powered business analyst.
Definition of Business Analysis
Business analysis is an umbrella term describing the combination of knowledge, techniques, and tasks employed for identifying business needs, then proposing changes and creating solutions that result in value for the stakeholders. Although a significant number of today’s business analysis solutions incorporate software and digital data-based elements, many professionals in the field may also end up advising on organizational changes, improving processes, developing new policies, and participating in strategic planning.
So, business analysts spur change within an organization by assessing and analyzing needs and vulnerabilities and then creating and implementing the best solutions. Much of the information used to draw these conclusions comes from data collected by various means, often falling under the term “big data.”
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What are Business Analysis Techniques
Business analysis techniques are processes used to create and implement plans necessary for identifying a company’s needs and delivering the best results. There is no such thing as a “one size fits all” technique because every business or organization is different.
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Best Business Analysis Techniques
Here are the top business analysis techniques. Keep in mind that business analysts who want to be project managers should be familiar with most, if not all, of them.
1. Business Process Modeling (BPM)
BPM is often used during a project’s analysis phase to understand and analyze the gaps between the current business process and any future process that the business is shooting for. This technique consists of four tasks:
1. Strategic planning
2. Business model analysis
3. Defining and designing the process
4. Technical analysis for complex business solutions
Many industries, especially the IT industry, favor this technique because it’s a simple, straightforward way to present the steps of the execution process and show how it will operate in different roles.
There’s nothing like good, old-fashioned brainstorming to generate new ideas, identify a problem’s root causes, and come up with solutions to complex business problems. Brainstorming is a group activity technique that is often used in other methods such as PESTLE and SWOT .
CATWOE identifies the leading players and beneficiaries, collecting the perceptions of different stakeholders onto one unified platform. Business analysts use this technique to thoroughly evaluate how any proposed action will affect the various parties. The acronym stands for:
- Customers: Who benefits from the business?
- Actors: Who are the players in the process?
- Transformation Process: What is the transformation at the core of the system?
- World View: What is the big picture, and what are its impacts?
- Owner: Who owns the impacted system, and what’s their relation?
- Environmental Constraints: What are the constraints, and how do they impact the solution?
4. MoSCoW (Must or Should, Could or Would)
MoSCoW prioritizes requirements by offering a framework that evaluates each demand relative to the rest. The process forces you to ask questions about the actual necessity of any given element. Is the item a must-have or a should-have? Is the demand something that could make the product better, or is it something that would be a good idea in the future?
5. MOST (Mission, Objectives, Strategies, and Tactics) Analysis
MOST is a robust business analysis framework—considered one of the best techniques for understanding an organization’s ability and purpose. This technique includes conducting a detailed, complete internal analysis of the organization’s goals and how to approach them. The acronym stands for:
- Mission: What is the organization’s purpose?
- Objectives: What are the key goals that help achieve the mission?
- Strategies: What are the options available for achieving the objectives?
- Tactics: What are the methods that the organization will follow to carry out the strategies?
6. PESTLE Analysis
Business analysts use the PESTLE model (sometimes called PEST) to identify environmental factors that can influence their company and how best to address them when making business decisions. Those influences are:
- Political: Financial support and subsidies, government initiatives, and policies.
- Economic: Labor and energy costs, inflation, and interest rates.
- Sociological: Education, culture, media, life, and population.
- Technological: New information and communication systems technologies.
- Legal: Local and national government regulations and employment standards.
- Environmental: Waste, recycling, pollution, and weather.
By analyzing and studying these factors, analysts gain a better understanding of how they will influence the organization’s narrative. This understanding, in turn, makes it easier for analysts to develop strategies on how to address them.
7. SWOT Analysis
One of the most popular techniques in the industry, SWOT identifies the strengths and weaknesses in a corporate structure, presenting them as opportunities and threats. The knowledge helps analysts make better decisions regarding resource allocation and suggestions for organizational improvement. The four elements of SWOT are:
- Strengths: The qualities of the project or business that give it an advantage over the competition.
- Weaknesses: Characteristics of the business that pose a disadvantage to the project or organization, when compared to the competition or even other projects.
- Opportunities: Elements present in the environment that the project or business could exploit.
- Threats: Elements in the environment that could hinder the project or business.
SWOT is a simple, versatile technique that is equally effective in either a quick or in-depth analysis of any sized organization. It is also useful for assessing other subjects, such as groups, functions, or individuals.
8. Six Thinking Hats
This business analysis process guides a group’s line of thinking by encouraging them to consider different ideas and perspectives. The ‘six hats’ are:
- White: Focuses on your data and logic.
- Red: Uses intuition, emotions, and gut feelings.
- Black: Consider potential negative results, and what can go wrong.
- Yellow: Focus on the positives; keep an optimistic point of view.
- Green: Uses creativity.
- Blue: Takes the big picture into account, process control.
The six thinking hats technique is often used in conjunction with brainstorming, serving as a means of directing the team’s mental processes and causing them to consider disparate viewpoints.
9. The 5 Whys
This technique is commonly found as often in Six Sigma as it is in business analysis circles. While journalism uses the “Five W’s” (Who, What, When, Where, and Why) in reporting, the 5 Whys technique just operates “Why” in a series of leading questions, this approach helps business analysts pinpoint a problem’s origin by first asking why the issue exists, then following it up by asking another “why?” question relating to the first answer, and so on. Here’s an example:
- Why? Because the wrong models were shipped.
- Why? Because the product information in the database was incorrect.
- Why? Because there are insufficient resources allocated to modernizing the database software.
- Why? Because our managers didn’t think the matter had priority.
- Why? Because no one was aware of how often this problem occurred.
- Countermeasure: Improve incident reporting, be sure managers read reports, allocate budget funds for modernizing database software.
10. Non-Functional Requirement Analysis
Analysts apply this technique to projects where a technology solution is replaced, changed, or built up from scratch. The analysis defines and captures the characteristics needed for a new or a modified system and most often deal with requirements such as data storage or performance. Non-functional requirement analysis usually covers:
Non-Functional Requirement Analysis is commonly implemented during a project’s Analysis phase and put into action during the Design phase.
11. Design Thinking
Design Thinking is a business analysis technique that is primarily used for problem-solving and innovation. It's a human-centered approach that emphasizes empathy, collaboration, and creative thinking to develop solutions that meet user needs and create positive user experiences. Design Thinking is often employed to address complex, ambiguous, or user-centric problems by focusing on understanding the end-users' perspectives, motivations, and pain points.
Do You Want to Become a Business Analyst?
If you’re looking for a more rewarding, better-paying career , you should consider business analysis. The higher demand for Business Analysts means security, marketability, and excellent financial gain. According to Salary.com , Business Analysts can earn a yearly average of USD 75,400. Simplilearn offers a Business Analysis Certification training course designed to make those first steps easier.
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MBA059: Problem Solving for Business Analysts
by Dave Saboe | Feb 16, 2016 | Podcast , Start | 0 comments
In this episode, Matt Fishbeck shares a six step problem solving framework that can help you to address the right problem and come up with the best solution for your organization and customers.
After listening to this episode, you'll understand:.
- Why the skill of problem is so critical
- How to apply a 6 step problem solving framework
- How to apply problem solving techniques
- Defining the problem statement
- Defining scope
- Elicit information & resolving ambiguity
- Identifying associations and relationships
- Root cause analysis
- Solution proposal
The Problem Solving Process Start by creating the problem statement. The problem statement is a well-defined statement or question to frame the context. After you have a clear and unambiguous problem statement, define the scope of the effort. The scope definition is probably the most important stage since it basically whether or not the problem can be solved satisfactorily. Scope is defined to apply constraints to the domain of consideration. When we have scope we know what to consider and what not to consider. Therefore, all possible solutions are directly dependant on the information within the scope. Once the scope is defined, you can move on to eliciting information & resolving ambiguity. Perform a stakeholder analysis and elicit information from all known stakeholders/sources as a basis for investigation. You can use workshops, focus groups, interviews, document analysis, and other approaches to elicit information. When we elicit information, we try to remove ambiguity as ambiguity represents the unknown, liability, and risk. To reduce ambiguity, we need to consider the taxonomy of ambiguity to provide a frame of reference to how we will resolve it. Ambiguity may be:
- Missing information
- Incorrect information
- Duplicate information
- Conflicting information
- Incomplete information
The above provide a basis to ask questions concerning all information that is within scope, to challenge this information to be reliable and suitable for use. Context diagrams and domain diagram can help resolve ambiguity. Next, we identify associations and relationships to organize the information so we can derive meaning from it. Information needs to be structured, aligned, and associated that provides an additional level of meaning. This is the basis for traceability. The linking of concepts. It’s not just solely used for requirements. Once we thoroughly understand the information, we can move on to performing a root cause analysis. A root cause analysis helps you to understand the underlying cause of the problem so you can address it instead of addressing a symptom of a greater issue. There are many techniques for root cause analysis including 5 Whys and Fishbone diagrams. Now that we understand the real root cause, we can propose solutions that will address that root cause. When identifying proposed solutions, consider the scope, constraints, and relative cost and value of each option. Problem solving is not some illusive black art; it’s an analytical process that can be broken down, quantified, and analyzed to identify the root cause to give rise to a viable solution. Listen to the full episode to hear all of Matt’s examples and tips for problem solving.
- Begin applying Matt’s six-stage problem solving approach. Often, the most difficult part of problem solving is knowing where to start.
- Start learning the root cause analysis techniques in the Guide to the Business Analysis Body of Knowledge (BABOK). The techniques will give you more tools to help in your problem solving efforts.
Links mentioned in this episode:
- Matt’s Problem Solving article on ModernAnalyst.com
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The 5 Steps in Problem Analysis
One technique that is extremely useful to gain a better understanding of the problems before determining a solution is problem analysis .
Problem analysis is the process of understanding real-world problems and user’s needs and proposing solutions to meet those needs. The goal of problem analysis is to gain a better understanding of the problem being solved before developing a solution.
There are five useful steps that can be taken to gain a better understanding of the problem before developing a solution.
- Gain agreement on the problem definition
- Understand the root-causes – the problem behind the problem
- Identify the stakeholders and the users
- Define the solution boundary
- Identify the constraints to be imposed on the solution
Table of Contents
Gain agreement on the problem definition.
The first step is to gain agreement on the definition of the problem to be solved. One of the simplest ways to gain agreement is to simply write the problem down and see whether everyone agrees.
Business Problem Statement Template
A helpful and standardised format to write the problem definition is as follows:
- The problem of – Describe the problem
- Affects – Identify stakeholders affected by the problem
- The results of which – Describe the impact of this problem on stakeholders and business activity
- Benefits of – Indicate the proposed solution and list a few key benefits
Example Business Problem Statement
There are many problems statement examples that can be found in different business domains and during the discovery when the business analyst is conducting analysis. An example business problem statement is as follows:
The problem of having to manually maintain an accurate single source of truth for finance product data across the business, affects the finance department. The results of which has the impact of not having to have duplicate data, having to do workarounds and difficulty of maintaining finance product data across the business and key channels. A successful solution would have the benefit of providing a single source of truth for finance product data that can be used across the business and channels and provide an audit trail of changes, stewardship and maintain data standards and best practices.
Understand the Root Causes Problem Behind the Problem
You can use a variety of techniques to gain an understanding of the real problem and its real causes. One such popular technique is root cause analysis, which is a systematic way of uncovering the root or underlying cause of an identified problem or a symptom of a problem.
Root cause analysis helps prevents the development of solutions that are focussed on symptoms alone .
To help identify the root cause, or the problem behind the problem, ask the people directly involved.
The primary goal of the technique is to determine the root cause of a defect or problem by repeating the question “Why?” . Each answer forms the basis of the next question. The “five” in the name derives from an anecdotal observation on the number of iterations needed to resolve the problem .
Identify the Stakeholders and the Users
Effectively solving any complex problem typically involves satisfying the needs of a diverse group of stakeholders. Stakeholders typically have varying perspectives on the problem and various needs that must be addressed by the solution. So, involving stakeholders will help you to determine the root causes to problems.
Define the Solution Boundary
Once the problem statement is agreed to and the users and stakeholders are identified, we can turn our attention of defining a solution that can be deployed to address the problem.
Identify the Constraints Imposed on Solution
We must consider the constraints that will be imposed on the solution. Each constraint has the potential to severely restrict our ability to deliver a solution as we envision it.
Some example solution constraints and considerations could be:-
- Economic – what financial or budgetary constraints are applicable?
- Environmental – are there environmental or regulatory constraints?
- Technical – are we restricted in our choice of technologies?
- Political – are there internal or external political issues that affect potential solutions?
Conclusion – Problem Analysis
Try the five useful steps for problem solving when your next trying to gain a better understanding of the problem domain on your business analysis project or need to do problem analysis in software engineering.
The problem statement format can be used in businesses and across industries.
Jerry continues to maintain the site to help aspiring and junior business analysts and taps into the network of experienced professionals to accelerate the professional development of all business analysts. He is a Principal Business Analyst who has over twenty years experience gained in a range of client sizes and sectors including investment banking, retail banking, retail, telecoms and public sector. Jerry has mentored and coached business analyst throughout his career. He is a member of British Computer Society (MBCS), International Institute of Business Analysis (IIBA), Business Agility Institute, Project Management Institute (PMI), Disciplined Agile Consortium and Business Architecture Guild. He has contributed and is acknowledged in the book: Choose Your WoW - A Disciplined Agile Delivery Handbook for Optimising Your Way of Working (WoW).
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Problem Solving for Business Analysts
This article explores the discipline of problem solving. Some might consider problem solving an art, while others might define it as science. The reality is a little in between since part of problem solving involves creativity, which by definition cannot be rationalized as science since we are basically unaware or not conscious of it occurring. Creative formulation of new concepts and ideas is a process lies deep within the sub consciousness and we are only aware of the output of the creative process; a new idea is a good example. We don’t understand how the idea was created, but we know we thought of it.
This article does consider the creative process and instead deems it out of scope. Instead a process for problem solving is proposed that defines a number of phases that can be rationally quantified, executed and basically tested and verified.
What does it mean to solve a problem? It relies upon two things occurring in the following order; an issue, or undesirable state that remains to cause angst, disadvantage, some negative consequence, or a limited capability and as a result some drive to overcome this situation through the formulation of some kind of a solution to resolve, nullify, or improve the current state of affairs.
How do we solve problems? Some people would say, by thinking. Thinking about what? The problem, right? Not necessarily. Thinking about the problem may help the situation and provide a starting point, but if thinking about the problem alone is not immediately returning positive inspiration and results then you are probably selling yourself short, being too narrow minded in breath and/or depth or focused on the symptoms rather than the cause. If the solution is not obvious, then there is obviously something missing from the equation.
For languages sake of descriptions, the term ‘problem’ is sometimes used interchangeably with the word ‘issue’. We don’t say ‘issue solving’, only ‘problem solving’. Issue is used since it is a more positive expression of the situation. One might say that there are no problems, only issues.
Undertaking business analysis, business architecture, or enterprise architecture involve the use of a broad spectrum of knowledge and best practice in frameworks and techniques to solve business problems. Apart from information relative to the professional practices, there are other domains such as the specific context in the organisation; the drivers & motivations, constraints, legacies, culture, etc. and issue or problem.
Finding a solution to a problem involves some kind of change within the organisation to be realized and formulated that could include a new product or service, capability, technology improvement, process maturity uplift, etc. All of these examples represent solutions to underling issues/problems that impact capability, and value to shareholders, customers, partners and suppliers.
Solving business problems always involves some kind of starting point, and a finishing point in terms of where in the spectrum one lies with respect to the problem and the solution.
Important Elements of Consideration
There are a number of important elements of problem solving which will be explored in detail later when considering the proposed overall process of problem solving. See below;
· Problem Statement: Describes the nature of the issue at hand
· Scope & Information: Associated information contained within boundaries of consideration
· Association and Relationships: Linkages between information within the scope
· Rationale: The logical deduction within the scope that links the problem to the solution
· Solution: A defined change in the system that nullifies, the problem and/or problem driver
The following are a series of sequential phases that should occur to complete a problem solving exercise, which would result in a solution to the problem statement. The phases can be viewed as a waterfall. If however a phase cannot be completed, it means that a previous stage is incomplete and requires further exploring. Hence each phase has an optional feedback loop.
The problem itself should be understood as something discrete, defined or quantifiable. It can be represented as question or a statement that describes something. Problems can also be ambiguous in that they are hard to understand or pin down as something concrete. Ambiguous problems require further exploration that can occur from proceeding to the next phase of defining the scope, and then returning to reevaluate the problem statement.
Definition of Scope
The scope of the problem is extremely important and provides the platform to which all other considerations are included and excluded. A good analogy to scope is the expressions of ‘ring fencing’. Picture yourself actually laying a fence around an area to encapsulate something. The goal of building a fence is to keep something in, and to keep something out. Seems obvious but it’s worth thinking about this in terms of information and problem solving. All information that needs to be considered is within the fence line, and everything else is outside.
This is important from a planning perspective since if one knows what information needs to be considered, one must review the information. Because the information is known one can actually plan and put constraints around this; who needs to be consulted, where the information is obtained from, what systems and resource needs to be drawn upon.
Scope itself is a constraint. The output or solution to a problem is directly dependent on the information that went into the problem solving process. Information that is critical to formulating the correct solution is essential to being included in the scope. This can be demonstrated through a mathematical equation.
Take the following equation, which the problem is to find the value of X;
X = Y + 10
Consider for a second that the problem is X, and X cannot be determined. What can be determined is that Y has the value of 5.
Unfortunately, due to poor research Y is not considered, only X. This equation is them impossible to solve and a solution is not found.
If however, you broadened the scope to include Y (Equals 5) then you could add 5 to 10 and have the solution;
This may seem elementary but it highlights that without proper considering and scoping, one’s perspective may not be adequate to see the whole picture.
Quite often in business some information is considered, but not everything due to time constraints and economic pressure guiding a shorter term perspective on the solution. Often when this is done the depth of analysis is limited resulting in shallow or knee jerk reactions and band aid solutions that do not address the underlying cause.
In this sense scoping can be strategic since it takes into account the broader perspective including a broader more considerate base of information that is often not focused on the short term.
Resolving Ambiguity: Ambiguity factors
Resolving ambiguity is very import. When there is confusion or uncertainty statements made become imprecise approximations that fuel a culture of anxiety. People need to have the right knowledge at the right time to solve problems by making sound decisions. It’s important to note that nothing sure footed can really be achieved when there is confusion.
Resolving ambiguity or confusion is present in the following situations. Note that the following does not include any human communication dynamics.
· Missing Information: Information that is not present
· Incorrect information: Information that can be verified by other information to be incorrect
· Conflicting Information: Information in at least two separate places that contradicts
· Duplicate information: Same or similar information that is in more than one place
· Incomplete information: Information that is present but has an unsatisfactory level of detail
How do you know if you’re missing information? Sometimes this is obvious based on the existing information. (You can see the outline of the footprint.). Other times there is no footprint, all your have is your current information, which is the best starting point for further information and traceability.
Traceability is the art of defining concepts and their associated connection points. Consider a dot to dot drawing or a mind map; what presents is an interconnected network. This network can be used to explore its boundaries, both its breath of scope and level of scope. This two way exploration can always start with the existing information, considering other related concepts and relationships.
For example, if the word ‘Interface’ was on a mind map, I could also draw other branches with connections that say ‘client’, ‘server’, ‘api’, ‘web service’, ‘xml’, ‘meta-data’, ‘contract’, ‘data flow’ etc. The root of this exploration is the word ‘interface’.
Traceability can be explored within a mind map, or in any other conceptual model where you are connecting information, to other information through some kind of relationships.
Root Cause Analysis
Since the entire scope has now been defined, the process of identifying the problem symptoms and problem causes can begin. The symptoms are obvious effects, outcomes, metrics, sales figures, costs, performance measures; negative qualitative or quantitative measurements.
Asking the question why is the basis for root cause analysis. It considers the result of questions and then traces backwards to underlying causes. If we ask the question why, the result is the answer and potentially the basis to another question. This is an iterative process that is continued until the underlying cause is uncovered. Note, that the underlying cause should also be within the bounds of the scope already defined.
For example, the problem is a person driving a car along the highway breaks down and is stuck on the side of the road. The problem is “Car has broken down”. See below for root cause analysis.
· Question: Why has the car broken down?
· Answer: Engine has overheated.
· Question: Why has the engine overheated?
· Answer: No water in the radiator.
· Question: Why is there no water in the radiator?
· Answer: Didn’t get the car serviced
· Question: Why didn’t the car get serviced?
· Answer: Forgot to get the car serviced.
· Question: Why did you forget to get the car serviced?
· Answer: It was a new car and the owner never had to get the car serviced before.
· Question: What is the servicing requirements of the car?
· Answer: Get it serviced 6 months after purchase, then 12 months thereafter. (Stated in contract.)
· Question: Did the owner read the contract?
· Answer: No. Owner didn’t read the contract and was unaware of car servicing requirements.
· Problem Symptom (Effect) = “Car broken down. Can’t go anywhere. Stranded on highway.”
· Real Problem (Cause) = “Owner didn’t read the contract and had no idea that car needed to be serviced”
Identification and realization to solution
Once the underlying cause is attained through root cause analysis, the solution is often the formulation of a preventative action that is undertaken to resolve the problem symptom from ever occurring. This is usually obvious since it is only a single ‘jump’ to understand the resolution.
In the above example, the solution would be for the owner after they purchased the vehicle to read the contract or ask the sales dealer. That way they would have understood the responsibilities of owner the car and taken it in for service, preventing the breakdown from ever occurring.
A less savvy car owner would have opted for a more reactive solution. In this example, the owner could have just carried a jerrycan of water in the car. When the car breaks down the owner can simply fill the radiator up again with water and restart the car. (Assuming the engine is still working.)
The most challenging aspect to problem solving is having the right information and doing adequate work in scoping the issue. When the right information has been considered, mapping out the context and domain diagrams, the relationships can be defined; the problems and their causal drivers can easily be identified through logical deduction.
It’s also important to point out that sometimes it’s better not to be too focused on the actual problem, since as we have demonstrated here, the problem itself is just a single breadcrumb in the investigation; a mere starting point for exploration. This is what problem solving can be described as, a process of guided exploration within a domain, that has boundaries and has been defined to be within scope. Exploration starts at the symptom and goes backward, forward, underneath and around the problem to provide context and understanding of the bigger picture.
Often it’s the bigger picture that allows us the understanding to see the problem relative to the context and proceed in a process of questioning from a defined starting point to an ending point. This is one way to solve problems that starts by considering the problem statement, examining the scope boundaries and information, conducting logical deductions; asking questions and assessing answers, asking further questions etc, and deriving a solution that addresses the cause or root of the problem. Sometimes root cause analysis is not required, other times there a multiple problems, seemingly interrelated with dependencies - and this is all compounded with complexity and ambiguity of course, not to mention miss communication and misinterpretation related to human factors.
Yes, problem solving can be challenging, but it can be made less so with a methodical and logical approach that works.
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10 Step Process for Effective Business Problem Solving
Posted august 3, 2021 by harriet genever.
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:
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?
Is your business model sustainable? Is it realistic for how fast you want to grow? Should you explore different pricing or cost strategies?
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?
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 .
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:
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.
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.
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.
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.
Posted in management, join over 1 million entrepreneurs who found success with liveplan.
Effective Problem-Solving Techniques in Business
January 20, 2023
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.
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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Problem-solving for business analysts - some tips.
For many in business, problem-solving is something that comes naturally, stemming from a combination of analytical thinking and creativity - but what exactly is a problem in this context? Is it something that can be thought out of? What counts as a solution to a problem, or a stopgap measure?
The process involved is a systematic, but complex one. Typically a problem will be defined as a problem statement, quantifying and reducing the issue to a single, core question or hypothesis. Following this, the scope of the problem is defined and which knowledge, department resources and so on enter consideration as a possible solution. This step is often re-evaluated several times for particularly complex problems until clear objectives can be set.
To ensure information available is sufficient to solve a problem, ambiguity must be removed in the minds of those examining it and from the data presented. This includes resolving cases of missing information, incorrect information, conflicting information, duplicated information, incomplete information, and so on.
At this point, a team will have a significant body of data to work with. This data must then be connected together to form a traceable link back to the origin of the issue at hand. This can be achieved by examining overt symptoms of a problem in the form of effects on a business: metrics, sales, costs, performance, etc.
From such interrogation, a root cause is determined and it is then that the problem-solver will arrive at a logical solution, typically in the form of a preventative action. This is because, for any problem, the best outcome is to prevent such an issue from arising again, or to put structures in place which preclude the possibility of the problem existing in the first place.
The ideal scenario when solving every problem is not only to solve the current problem at hand, but to ensure that the problem does not recur. Without identifying the root cause, this will not happen. It is analogous to treating the symptoms of a malady without treating the underlying condition that exhibits such symptoms.
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